The Lunacy of Lego Investors

[rob-cubed]

The problems is about parts, not sets. Lots of discontinued sets are high in price because they have unique part or part+color combination. There is no need to re-release the whole set to lower down the price - TLG needs to include those parts in some new sets and the price of old sets will go down

This is a great point. Certainly many of the more expensive retired sets would be cheaper to recreate if more part/color combos were available, and this would remove much of the speculative value for investors.

However, I think it's in LEGO's best interest to keep certain part/color combos rare. This ensures certain retired sets retain their value (making me more willing to part with my hard-earned cash on the next one). It also creates artificial demand when a rare part is included in a new set. I know LEGO claims that us AFOLs are a tiny fraction of total sales, but it seems like some of their marketing tactics are pretty honed to adult sensibilities and finding that right balance between scarcity and demand to allow them to tease out the most retail profit. Especially when it comes to sets containing those rare colors/parts. I've considered buying a second Parisian Restaurant just for the OD Green bricks, which may or may not make it into future sets.

[legoman19892]

By the way, are last year's Monthly Mini Builds REALLY selling for $250? I can't believe there's that kind of demand for them, given that you can easily Bricklink them from common parts. We have all of last year's, but they belong to my daughter and I doubt she'd part with them even for $250. Still, it'd be nice to know if we're sitting on that kind of cash.

That is the asking price. The ad has been up for at least four months. No one has bit.

http://www.eurobricks.com/forum/index.php?showtopic=95904

Someone was also trying to sell a PotC mosaic that was built in the LEGO store for $400. The ad is gone, so he either gave up after 5+ months of no offers, or he sold it.

There is a running joke in the LEGO store I work at about how we are going to run a sting operation to see if an employee is trying to sell those.

[ResIpsaLoquitur]

That is the asking price. The ad has been up for at least four months. No one has bit.

http://www.eurobrick...showtopic=95904

Someone was also trying to sell a PotC mosaic that was built in the LEGO store for $400. The ad is gone, so he either gave up after 5+ months of no offers, or he sold it.

There is a running joke in the LEGO store I work at about how we are going to run a sting operation to see if an employee is trying to sell those.

Oh, I see. He's selling them with the cards. Maybe that's a thing that makes it more complete. About 10 years ago, I got a rare "lava" Darth Vader from Target when Episode III came out, and you got a card so you could claim it when you lined up at the store. I eBayed mine WITH the card (the store let me keep it), and that may have driven up the final sale price.

[Brickplumber]

I guess I fall into the type 3 investor. I buy and sell sets to fund my large MOC building. I feel I sell at fair market value, not trying to retire, just help fund my hobby. I have been collecting for 17+ years and have recently (last year+) been selling my sets on Amazon. As stated, the older ones sold well, but it takes a lot of storage space and patience to search for sales and then wait till the sets become discontinued. I guess I justify the time as part of my hobby now. I make a pretty good living, but with kids in college, my funds are needed elsewhere, so this is worth it in my eyes.

[whydoris]

I am a hobbyist. I play with my Legos. Coming out from my dark age only late last year, I bought some legos from the secondary market (ebay/gumtree etc). Without the secondary market, I won't be able to get those sets and pieces from the retail shops or Lego store.

But I don't buy at inflated price from those obvious Lego investors - the Australian RRP is already inflated!! I don't have those sets like Cafe Corner, Green Grocer, Taj Mahal, Eiffel Tower, Carroussel, Ucs Falcon, etc. I will never buy one of them at the current price level just because they look so good.

I am a strong believer that Lego will improve and make better sets/parts in the future - so why look back? If I miss out on a few sets, so be it. I just wait for the next one. Maybe there will be another ledendary set which going up 10+ the RRP in time. I am not taking my bet on it.

As to those people snap 10+ boxes and flip them on ebay/BB for quick profit, I don't like that either. But as long as there are impatient buyer out there, they won't be out of business. There are plenty oppotunitists in this world (not limited to Lego).

I sell Lego on ebay from time to time too for stuff I don't want but coming in a bulk buy - Lego is a very expensive hobby and I have to recoup some money if I can. After through the pain of listing, answering questions and arranging postage, then the deductiion of ebay and paypal fees, I seriously don't think it is worth a while to make "money" from Lego as a business.

So my conclusion: forget investment, let's sit back and just play!

[Faefrost]

Well, ok...I'll chime in here in the hopes that I don't get yelled at.

First up, I am a toy fan first and foremost. My daughter and I buy Lego, we play with Lego, and we MOC with Lego. It's primarily a hobby for us, and I'm not a professional reseller like some of the people you seem to be talking about.

I *am* doing a little bit of "Brickvesting" on the side. On occasion, I have found a set in the 50% off range, and if I think it could be worth something in a decade, I'll stick it in the closet and we'll see how it turns out in a few years. Off the top of my head, I have the most recent Darth Maul's Sith Infiltrator set, Lord Vampyre's Hearse, and the Unexpected Gathering Hobbit set, both purchased at half price from a clearance sale. With the Hobbit in particular, I am guessing that Lego will discontinue the LOTR stuff after the Hobbit films end, so I figured--yeah, Bag End could be a good long-term investment.

Other than that, I occasionally resell stuff to finance my hobby. Look, Lego is expensive and we don't budget a lot towards toys outside of Christmas and birthdays. This past winter, the three Advent Calendars were selling like crazy on eBay. I was fortunate enough to find some unsold ones (the City and Friends ones) at Target, so I bought them and listed them on eBay at cost. (At a minimum, I want to make my money back, although I groan at the prospect of having to ship an item where I'm not earning anything on it.) People bid on them like crazy, and most ended up selling for double what I paid for them or more. I ended up making somewhere around $170, which made a nice contribution to our Christmas budget.

I really don't feel any guilt on the Advent Calendars, because people paid what they bid. Like I said, I put the opening bid at cost, so that was $25 or $30 or whatever the Calendars cost. It was the buyers who kept pushing the price up to $40, $50, or more. I personally wouldn't have spent that myself--I love my kid, but I'm not willing to spend $70 to let her open a window for 10 pieces once a day. Several other people were, though. That speaks more to them than to me, or maybe to Lego for not producing enough Advent Calendars in 2013 which drove up the demand more than usual.

By the way, are last year's Monthly Mini Builds REALLY selling for $250? I can't believe there's that kind of demand for them, given that you can easily Bricklink them from common parts. We have all of last year's, but they belong to my daughter and I doubt she'd part with them even for $250. Still, it'd be nice to know if we're sitting on that kind of cash.

And there is nothing wrong with what you are doing. Nobody is saying it is wrong or distorts the system to grab an occasional good deal and setting it aside for future use or sale. The system thrives on that. 5 years from now some nerdling will be ecstatic to buy that unbuilt Bag End from you. Selling off sets that you don't need or such is fine. But there is a difference between that and wholesale commodities investing in plastic.

(In the name of full disclosure, I like you have a couple of sets squirreled away for posterity. helms Deep, Jabba's Palace, Bag End, Vampires Castle and the Alien Conquest EDF Mobile HQ. all bought on deep clearance discount and deals just to good to pass up. I may sell them someday. I may give some to my nephews. I probably won't part them out as I tend to limit myself to only buying extras of the stuff that I truly adore as a set. Sets that I consider in the top 10% of what they ever made. I'll tuck away an extra of what I love for later. But I don't view it as a planned investment. )

[jtr]

Hording for the sake of greed ruins it for all and is pretty poor.

Agree there seems to be a large (speculative) lego investment bubble - just too many people with the same idea. I hate to think that all this horded lego never actually hitting the market because the price never rises more than 30% (and other factors)

I can see storage shed auctions in the future "doh, not another lego haul"

Also i could never buy a MSIB, say the Zombie set for $200, and actually open it - my rational brain would be unable to process this.

Edited May 29, 2014 by jtr

[Artanis I]

I agree with those that have a negative opinion on when people buy up heaps of a new set, and as a result artificially inflate the price due to there not being enough supply for the demand that previously existed. I prefer the attitude "buy Lego for Lego", not buy Lego for profit.

A guy bought all the BTTF sets locally (apparently he doesn't even "know how" to build Lego sets, he just holds onto sets to resell) so that when the price goes up he'll make a profit. Even if his plan falls through and they don't go for a fortune, anyone else who wanted one of those sets can't get one except via resellers or the prohibitive postage charges of S@H. This is called scalping. In some areas scalping is illegal.

You can't blame TLG for not having "enough" supply in this case, their only alternative is to make way too many copies that just sit there on shelves forever. That is bad for business.

All anyone can really do is give a dirty look to the people who unfairly affect the retail supply, and consequently artificially inflate the prices.

[rollermonkey]

I can't even read all of this without getting mad.

[Alternator]

Scalpers annoy the hell out of me. The lot that descend (buy up bulk) on the limited run editions IMO don't add any value - and as such I classify that as parasitic. They effectively insert themselves between the customer and the producer and hamper the trade of the goods rather than facilitating it.

Speculative investors - don't annoy me as much, though I worry if it leads to a glut which ultimately hurts the product.

But resellers (that sell at realistic prices), and parters; I think both offer useful services to Lego fans. Parters are probably a godsend for MOC's, and resellers enable people to buy sets that they wouldn't have otherwise had a chance to buy (providing the price isn't so extortionate).

At the end of the day TLG are the gate keepers on this stuff; they determine how many sets are available, and it's their processes that don't (or sometimes do) adequately prevent scalpers buying out limited run sets.

Though I wonder on that last point, how many Rovers did go to scalpers vs genuine customers. The same goes for the 41999, did many genuine customers miss out at the time?

Oh and I wish Lego would do a rerun on the first two in the City Street series, they were before I got back into it, but I hear even then they had a very limited run - I'm sure there are a huge number of AFOL's eager for those two sets (just not at the crazy resale prices).

[KingPixels]

I don't mind scalpers, and I don't mind investors, but I hate it when LEGO does exclusive figures like the SDCC Super Heroes figs. It's not like LEGO's doing it for the kids, since any parent is going to sell the figure if they win, and they're definitely not doing it for the fans, since they only make a couple of hundred and that's it. The only people benefited by the exclusive figures are the scalpers.

[emilstorm]

Unfortunately I don't think there is much to do about these resellers charging that much, except of course not buy there stuff. But there is always going to be enough people willing to buy 5 sets out of the 12 they have to make it wortwile for them.

The only things Lego can do is either make more or be stricter with their maximum buy limits. But of course they want to sell there stuff, and I don't blame them, after all they are not just in business to make little kids smile. And of course the number of a set they produce is based on a market analysis, and doing a second production run to make a smaller number is necesarrily worth the production and logistic cost.

I can't say many nice things about resellers speculating in buying up a stock to run prices up, but that is unfortunately a side effect of having a free market, and as long as a few people are willing to make there business sustainable, they will keep doing it.

[UsernameMDM]

I dont ever remember being mad and i also said IF I wanted to blame anyone. Just calmly stating opinions. :).

Also, for a limited run item, people do have the same opportunity, BUT the length of the opportunity is greatly diminished bc of the limited number and the influx of the resellers. Therefore, making it harder for an average fan to pick it up at retail.

Well, not YOU particularly, just those who actually are upset.

[LordRanious]

There are some resellers who have "extreme prices" but if you look at the history of bought sets, you see they are not very often bought. More of a Problem are the people who sell everything old as "hyper rare collectors stuff" or lie in ofher ways. I by myself encountered tactics where someone had only 1 Pirate Ship ( suspiciously low price) but stated he had 4 sold 4 and I never got it. It took months to get the money back. Overall most of the times the people are the ones who buy an old star wars set for 100+ which only consists of a little build and two figures which are rare. I can understand this well but for every overpriced auction or whatever there are the ones who are very inexperienced sellers and you can make good deals. But If you are a figure collector (which I am not) I could understand some of the problem in Lego's

politics as many of you stated before.

[UsernameMDM]

I agree with those that have a negative opinion on when people buy up heaps of a new set, and as a result artificially inflate the price due to there not being enough supply for the demand that previously existed.

This is pretty hilarious. Other than limited run sets (which EVERYONE has the same window of opportunity to buy, aside from exclusives, which, by their very name, are supposed to be exclusive), I seriously, SERIOUSLY doubt anyone or a group of people have enough buying power to purchase "heaps of a new set" so that prices are "artificially" inflated.

[Phrea]

I was watching a YouTube clip the other day [swoHODZToCg] and all I kept thinking was: what if a kid really looked forward to get a few polybags with his pocket money? That kid will be so disappointed. I know I would be.

And what does he do with them? He parts them out !

I didn't make a link, because that might bring unwanted attention, and that's not fair either.

[UsernameMDM]

I am a strong believer that Lego will improve and make better sets/parts in the future - so why look back? If I miss out on a few sets, so be it. I just wait for the next one.

Exactly. I remember a few years back people were paying ridiculous prices for SW Kashyyyk Troopers. Now we have a battle pack with them!

[eileenkeeney]

Lego is a non necessity, so really I don't care if others want to invest in it, even if it means I cannot easily obtain a set I might want.

There is no Lego set I want so badly that I will buy it much above original retail.

I think it is silly to buy any set that is still in production, for more than original retail. One should just exercise patience, and buy when it becomes available.

I think learning patience is also a good lesson for kids.

Personally, I would rather buy stock than Lego, if the purpose is pure investment. With both there are some buys that will go WAY up, and some that will not. I guess with Lego there is less chance of the investment completely loosing value, but it also takes up more space than a stock certificate.

Lego is harder to move when I relocate. It is more likely to get damaged or stolen from me.

It is also very hard for me to have a Lego set that I do not want to rip open for some piece or another.

I am baffled that anyone would pay the prices now being paid for some sets. Some of these sets are not even that rare.

If a very similar thing can be built out of pieces that are commonly available, for much cheaper, why spend a thousand dollars on a set that sold only a few years ago for under 200?

I am even more baffled that anyone would pay $63 for the stickers that go with the Grand Carousel.

But then I hate stickers. Stickers are also very easy to forge in high quality.

I would much rather use the metalic gold bricks and tiles to get a shiny look.

But maybe someone else would be baffled that I was willing to pay over 80 cents each for chrome silver 1x2 tiles.

[fred67]

OK, so I haven't commented on this yet, but I wanted to add my two cents.

I largely agree with UsernameMDM - I believe in the free market, and sometimes it seems to suck for consumers and "fans," but I wouldn't have it any other way, because market controls will makes things in a free market worse, not better.

So really, if you think a set is too expensive, then don't buy it. Unfortunately, someone with more money (or simply who values LEGO more) will buy from those resellers, making it worth their while. I've bought a lot of sets I never built, but I never bought anything I wouldn't want myself. A lot of those sets I finally came to the conclusion that I will never have enough space to build and display it all - then I see the prices for those sets have gone up (sometimes substantially). So am I supposed to just "give it away?" Or do I get a fair market price when I sell?

There's been the odd occasion when I bought something I figured I would resell... I bought an extra Green Grocer because my local LEGO store had a damaged box, so I bought the damaged box for me to build immediately, and saved a good one to sell later. Now look at what happened: I got roughly double what I paid, which gave me a large part of the next modular I bought for me. The set had long since been discontinued, yet the buyer was happy to get a brand new, unopened set (and for a reasonable price, relatively speaking... I usually chop off a bit of the lowest comparable bricklink price). I bought several Emerald Nights... built one, loved it, bought more... built the red version, now I have a better "Hogwart's Express," and an extra passenger car... ended up selling one, but still have one. I might build it, I might sell it... as I said, I don't buy it unless I want it. If I come to the realization that I will never build or need it, I will try to sell it, and I will ask the going rates.

That said, I agree it's frustrating when a new set comes out, or a set goes on clearance, and it's sold out in a really short amount of time because people buy many copies of the set. Unless TLG wanted to limit it to 1, you're going to see this... (limiting to 5 helps a bit, but buyers just use multiple accounts). But do I want it limited to 1? No! Sometimes sets are better if you combine two or more! Sometimes you want a small fleeet of X-Wings or TIE Fighters! The truth is, I rarely buy sets on bricklink or ebay anyway, so don't feel like I've been ripped off at all. The only one I can think of is the UCS Naboo Fighter, which I paid $65 for for my son (I think the original price was more like $35). But then I realized it was a "valuable" set, kept it, and let him pick a different set. Now that set sells for several hundred. I still have it. I'm not offering it for sale. Some day I hope to display it.

So I agree that the OP conflated various scenarios, here...

1. People buying LEGO as an investment in their own futures are probably wasting their time... investing in a variety of stocks or plans is probably more worthwhile... the interest compounds, there is no storage or work requirements on your side of the equation, and if you just do it consistently, it's a better investment for your own future. You'd have to rent a warehouse to store all those LEGO sets for the same kind of return you'd get just reasonably investing.

2. People buying LEGO as an investment in their hobby, however, might be on to something. If you buy two modulars every time a new one comes out, then sell one for double the price once it's discontinued, you could theoretically fund your whole modular line just from the purchase of the original two (more or less). Timing doesn't always work out that great, and you might want to double up (and you'll have to wait to buy newer ones until the older ones actually get discontinued), but it could work. In the same vein, "investments" in other themes can work, too, especially popular ones like Star Wars. Then again, that type of buyer isn't buying 10+ copies of the set.

3. People "scalping" LEGO (buying up all the sets to sell for a profit) initially hurt the other consumers by making those popular sets hard to find, but can be beneficial when someone gets into the hobby after the set has been discontinued. I largely am not happy with these people, but put up with them as being part of the free market, because I don't like the alternatives. But they can also be beneficial in other ways... like the ones who buy cases of CMFs, identify them, and then sell them for retail+. If I can't find that last figure, or there's ones that I want more of, it's far easier to go to bricklink then search them out elsewhere, especially older series.

4. People buying sets to "part out" on bricklink are largely like group 2 - only they may be looking for specific pieces for themselves that are available in certain sets, then sell the rest of the set to recoup their money. I have no problem with them... in fact, I think they're great, as I love bricklink, and that's a large part of what bricklink is. On top of that, you again have people like this buying cases of CMFs and taking the ones they want and selling the rest... that makes known figures available on bricklink, and makes it easy to complete a set, get multiples of the ones you want, and find discontinued ones.

5. Collectors... I put myself in this category. I buy sets because I like them. Sometimes two or more copies. I always keep at least one for me. Sometimes I realize I won't ever build the extras. Sometimes I bought SW battlepacks for army building... but I don't play, I display, and realized I will never have space large enough to build a really cool MOC with all those figures. I always have at least two full sets of CMFs (exceping the movie series); one to save (new, unopened), one to display. I don't know why. Maybe I will sell them some day, maybe I will give them to my grand kids, or even to charity. I like getting what I consider "collectibles" in twos... one to display, one to save. It's the collector mentality combined with the LEGO lover - I don't want to buy something and not show it off.

As an example of how I am, when I built Cafe Corner, it had long been discontinued. I had the box from when I bought it years earlier. I asked my daughter which set she wanted to build, and she picked it out. I went to bricklink, and while I paid $140 for it, the low price at bricklink for North America was like $850. For that money, I could buy five new modular sets.

So I built it. Because that's what I bought it for. Imagine, though, if I'd bought two?

[TheLegoDr]

I'd love to be able to make a quick buck selling LEGO, but I do think it would take all of the fun out of it. I considered opening a bricklink store to sell some unused pieces to help supplement the rest of my hobby, but then at times I wonder if I'll ever find a use for some pieces. I'd hate to sell something and then need it later for a MOC. Either way, it would suck the fun out of it for me. I want to be able to build and collect certain figures.

Now with all of that said, I will not pay some of those crazy prices for things. With my collection and a very little purchase from LEGO I was able to build my own version of Green Grocer (the only subsitution really was sand blue for sand green) and most of Cafe Corner, outside of a lot of the dark blue (although I do have the arch). And I bet I spent less than $75 total thanks to my collection from sets. I'd never pay the actual retail market value of them. Certain figures I'd like to have, but I don't want to spend over a certain amount. The most I've spent on a figure was a SDCC Phoenix, and only because I saw it for a really great price. Otherwise, I shoot for about 10-15$ per figure and it is rare I'd ever spend that much.

I look at it, I can either buy this entire set and get the pieces and figures for $x, or I can buy just the one figure I want for $lower x. I started being smarter with what figures I actually want a collection of. Before I did just buy all the sets to have everything (which did give me lots of pieces to build the aforementioned sets).

But reselling isn't something that interests me. It is great they are out there since LEGO won't/can't sell their licensed figures directly (and those are the only sets I buy), but I don't love some of the prices. That's the only reason I buy on eBay for figures is in the off-chance I get a really good deal. But I always check bricklink first for values since those seem to be pretty steady.

Plus, I don't know how some people can have so much money to buy so many sets at first just to resell. My LEGO money is limited as it is. I'd hate to waste it on multiples, just to sell them and then buy more multiples again later. I'd never be able to supplement my hobby.

As for the Ecto-1, I can imagine it selling out quickly just like BTTF, but like BTTF it will come back in stock. I can easily see them doing another production run of that set. The Mars Rover didn't have multiple production runs I don't believe. They may have went out of stock online, but that doesn't mean it was out of stock and they did another production run and it sold out. The BTTF sold out and came back in stock and it is still in stock from that presumed second production run. Either way, Ecto-1 will follow suit due to popularity. So if I miss out, I'm sure it will come back around. But I'm going to try my hardest to not miss out.

[Eigenbroetler]

I was watching a YouTube clip the other day [swoHODZToCg] and all I kept thinking was: what if a kid really looked forward to get a few polybags with his pocket money? That kid will be so disappointed. I know I would be.

And what does he do with them? He parts them out !

I didn't make a link, because that might bring unwanted attention, and that's not fair either.

if you look at that video he CLEARLY states that they are for the Philly Brick Fest GIVEAWAY. and he is not going to part them out.

You should really watch the video again or at least 1 hour and 4 minutes in where he says what the bags are for.

EDIT:

I have talked to Chris about his video mentioned above, and this is what he wanted you all to know:

Hey all, that YouTube video in question is mine. 4 times per year, Target cuts the price on seasonal polybags by 50%. The company I work for who runs Brick Fest Live and Philly Brick Fest goes to all of the Targets in our area and buys what we live to call "#allthebags." We then use them for games and giveaways at our conventions. By no means do we sell them or part them out.

Edited May 30, 2014 by Eigenbroetler

[obsidianheart]

Anytime I get aggravated at secondary market parts and sets prices, I remember when I went into my Second Dark Age and sold all my LEGO Star Wars Sets for an intimidatingly large total amount so we could be okay financially when my son was born.

Mostly, if I think a set is too expensive, I just shrug and go on with my day.

Sometimes, I'll see if I can build the expensive set in a different color palette for a fraction of the price. That can be fun.

[Off the wall]

I've seen the word 'greed' used in several comments. I have no idea what 'greed' is. How about a little help, please?

[Chills]

I've seen the word 'greed' used in several comments. I have no idea what 'greed' is. How about a little help, please?

noun

noun: greed

intense and selfish desire for something, especially wealth, power, or food.

I believe those using the aforementoined word in this thread are referring to the motivation of some LEGO buyers; that they buy specific sets simply to acquire a profit (specifically from that of LEGO collectors) instead of buying for the love and appreciation of LEGO.

[danth]

What gets me is when people put sets up for sale at prices that nobody will EVER pay. Like a Buy-It-Now only eBay sale with a price of $1000, when the same set is available on Bricklink for $200, and when the same set sells at auction for $100. I've seen those sets just sit for years and never sell. You would think the seller would lower his price every time it fails to sell, but nope. It's like they have a mental illness.

If you want to scalp Lego sets, at least do it at auction where it will sell for what the highest bidder will pay for it. But you're just wasting everyone's time when you set a stupidly high Buy-It-Now price when you have no idea what your set is worth.

Sometimes I wonder if people that do that have some ulterior motive. I could see ridiculously high Buy-It-Now prices driving up auction prices.

Personally I think Buy-It-Now has mostly ruined eBay.

Edited May 30, 2014 by danth