aminnich

Depreciation of Technic sets?

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I was thinking about this today, not really sure why. I want your opinion. 

If technic sets get much more expensive after they officially retire, than do they depreciate after you buy them, assuming you open the box and build the set? Kind of like buying car, driving it off the lot depreciates the car by like 10%. 

What are your thoughts? 

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Once the package is opened, the price goes down A LOT. 

So the question is: Do you want to buy a set for the other person or do you want to buy the set for yourself. 
Lego is meant to be enjoyed. Have fun with your sets and play with them. They are not meant to be currency. 

That's my logical reasoning about this topic.

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It depends on what you value.

Sure, the price goes down if you start using it. But the value of the Lego can only be "consumed" by using it. After all, Lego is meant to build and play with, so the value of Lego is that it can entertain the people who build/play with it.

So my thoughts are, I don't care that that number called "price" goes down, because I don't intend to sell it. I intend to get value from it and that can only be done by using it.

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I completely agree that Lego in general is not currency, but you could say the same thing about cars.  

An example of what I am talking about;

On amazon, I can buy 42055 (BWE) for $279.95 and have it next day shipping to my house brand new in box

https://www.amazon.com/LEGO-Technic-Bucket-Excavator-Construction/dp/B01CU9X8AC/ref=sr_1_1?ie=UTF8&qid=1505762569&sr=8-1&keywords=42055

OR I can buy from bricklink for $200 used and it be at my house within the next week. 

https://store.bricklink.com/ahmedumer&itemID=126040446#/shop?o={"invID":"126040446"}

So, in this case the depreciation of the set going from at least one (could me multiple) owner to another (me) is $80, not factoring in the difference in shipping and taxes and whatnot.  

Do you think that $80 is a huge amount of deprecation for a set like this one? 

EDIT; going off of what Erik said

That is exactly my opinion, I tend to buy used technic in bulk for cheaper than the set was brand new.  If the set was used, but taken care of, what do I care?  I will just be parting it out and using the parts.  Using my above example, why would I buy the amazon 42055 for $80 more, when I can just buy from bricklink and be able to spend that $80 on more sets down the road.  

Just my opinion, what is yours?

 

Edited by aminnich

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1 hour ago, aminnich said:

That is exactly my opinion, I tend to buy used technic in bulk for cheaper than the set was brand new.  If the set was used, but taken care of, what do I care?  I will just be parting it out and using the parts.  Using my above example, why would I buy the amazon 42055 for $80 more, when I can just buy from bricklink and be able to spend that $80 on more sets down the road.  

Just my opinion, what is yours?

 

Because you're like me- want to build the set and want it untouched.

for that reason I do prefer the open box sealed packs sets, but the premium is nearly as much as sealed anyway.  Still, I'll take savings where I can get them. 

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oh, you are one of those people... :grin:  Nah I am just kidding, but that is a valid point.  If you are going to have the set built and put in a display case, you would want to buy brand new so that you do not have the risk of a part being broken, or god forbid a sticker is not placed perfect :sarcasm_smug:  Using my example again, in your case spending that extra $80 is probably worth it, and keeping it in a display case also probably does not depreciate the model as fast either.  

Edited by aminnich

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Interesting question, it's all about the reason why you buy a Technic set. If it is for investment, then simply forget about the content of the box, shouldn't be opened ever (but I don't think we have many people here being able to resist :) ). If you'd like to build it once and have it on display, then you shouldn't care about the used price as you won't sell it anyway. The car analogy is a bit tricky, as you won't stop at 1-2 Technic sets and sell it after a couple of years to get a new one. You don't use it, it's more like a vase or a painting. You don't really care about the aftermarket price of a vase when you buy it..

The third option is like myself - if you like to build once, then use the parts for something else, then sell the less used sets to get something new - in this case the best is to buy in bulk, or wait patiently on Ebay for a good used bargain. If you want to get specific parts, buy a relatively cheap set with those parts included, then sell the rest.

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2 hours ago, kbalage said:

The third option is like myself - if you like to build once, then use the parts for something else, then sell the less used sets to get something new - in this case the best is to buy in bulk, or wait patiently on Ebay for a good used bargain. If you want to get specific parts, buy a relatively cheap set with those parts included, then sell the rest.

I cannot stand the thought of selling a technic set of mine, system on the other hand, I could sell to get more technic, but for now, I will keep them, even if I have too much.

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I mostly buy sets for parts because it is cheaper to buy a set than all those parts, part by part (and you have always some extra or unused parts to tease you for another project). There are very nice sets, but they (mostly) do not fit into my "ideas" for moc collection; OK except Arocs...so if parts are in good condition and if I can afford it I'll buy particular set and it does not have to be sealed box even better without box (I already do no know what to do with so much empty LEGO boxes)

Edited by I_Igor

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The only reason I can justify the price for LEGO Technic sets is the resell value afterwards. I think 280 bucks is way too much for the joy I get from building a set like 42055. But the reason I buy most of the Technic sets is because I know I can resell it for lets say 75% of the original price. In this case, 70 bucks is worth the joy.

But once more, this is MY reason I buy them.

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2 minutes ago, Freezer118 said:

The only reason I can justify the price for LEGO Technic sets is the resell value afterwards. I think 280 bucks is way too much for the joy I get from building a set like 42055. But the reason I buy most of the Technic sets is because I know I can resell it for lets say 75% of the original price. In this case, 70 bucks is worth the joy.

But once more, this is MY reason I buy them.

That is a good point, but here is my question then to you. What if you bought the set used for $200, built it, got tired of it, sold it. How much do you think you could get for a "double used" set? If the deprivation of the new set was $80, would the depreciation of the used set still be $80 or would it be $40? 

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6 minutes ago, aminnich said:

That is a good point, but here is my question then to you. What if you bought the set used for $200, built it, got tired of it, sold it. How much do you think you could get for a "double used" set? If the deprivation of the new set was $80, would the depreciation of the used set still be $80 or would it be $40? 

Nobody specifies the number of previous owners so every set is a "second" hand set. If I would buy a second-hand 42055 for 200$ the resell value stays the same (excl. other factors like supply&demand and EOL). Thus I build and own the set for "free". But most of my sets are bought brand new because the excitement of opening a fresh box with sealed bags is worth the extra bucks.

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Are you perceiving cost as value?  To me the cost of a set is immaterial (within reason), the value comes from the enjoyment of the build, if you enjoyed building the set then I would say I have had good value out of it, yes even 42070.

I never buy sets with a view to resale value, as to me this goes somewhat against the spirit of Lego

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I know my point of view is not the most popular, especially not on this forum. But a lot of people won't even buy LEGO in general due to the relativly high prices. I'm one of those persons but I can justify it by taking resell value in perspective. I currently own about 4000 euros worth (=cost) of Technic but the joy of building and owning the LEGO will NEVER be worth (=value) 4000 euros to ME. 

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For me brand new sets give me extra thrills and certainty that all the parts are in perfect, immaculate condition. Including the instructions and stickers which I use seldom. But is it worth the MRP, sometimes no.

The sets that I buy used I first disassemble, pack in cloth and wash thoroughly. Check the stickers condition and usually peel them off and clean some more. They are way cheaper than new ones and don't depreciate as much. Sometimes they even gain value.

I came back into Technic after about 15-20 years of absence and am trying to piece a collection of the sets from the years gone as a way to fulfill my childhood dream so the only way to own most of the sets is by purchasing them used. I try to pick just the ones in perfect condition. But for a good deal I will buy even the less cared for and less interesting ones just for the parts and build experience. I know that if needed I can re-sell them with minimal loss or even a profit sometimes. This way the depreciation does not hit as hard as with the sets bought brand new.

So what is the depreciation value of Lego Technic? That depends on how, when and for how much you buy and later sell your sets. It's just a matter of how much time you have and how much are you willing to spend.

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This is a very interested conversation. It's not that I am personally comparing sets to their retail value, I just know a lot of people do that. 

Lately I have been buying used Technic sets, about 1 every 2 months give or take. Sometimes I will buy entire collections if the price is right. The individual sets always come from an adult builder, non smoking household and has taken care of the model. If all these conditions are met, I will buy it for closer to MSRP. For collections, I do not really care what the condition is, for the right price, there could be broken pieces for all I care. I am buying the collection for parts. Also, those parts get washed throughly and then separated. 

Right now, I am talking to a guy that has a bunch of sets. I am curious to know what his depreciated value of his sets will be. As I do not like giving a over/underestimated value on something I am buying. 

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I am pretty sure the only sets that skyrocket in value are those that people loved, were justifiably priced at the start and were good enough to be flagships or were flagships themselves. Eg- 8880, 8258(from what I've heard),and probably 42069 soon..

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If the law of lemons is anything to go by, then the depreciation of sets is about to get a lot worse.

I noticed recently that the knockoff chinese are now making older technic sets - the 8258 and 8285 both spring to mind, along with the racers ferrari series and the williams F1. Heck they're now even making the 5571 from 1996.

 

Since the new sale price is a lot lower than the inflation adjusted price of the original, and no doubt the supply is far greater than that of originals, the more people that buy these and then try to move them on later, the higher the effective depreciation of genuine sets since they'll get heavily diluted by people who don't know or care.

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Just now, bonox said:

people who don't know or care.

I know this forum accounts for a very small percentage of LEGO Technic fans, but I do not think any of us will want a fake set.  Except maybe for a review or something of that nature. 

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i'm not saying you do want one. But when buying, you as as a buyer rely on the seller accurately describing the item you're buying. They may well not know what the true condition or original is (ie not know or care what they're selling) and since LEGO is the brand name (and not lego compatible), that's how they get sold.

 

Thus buyers set their expectations low since you don't really know if it's genuine or fake, and thus the market for lemons progresses. It was a paper presented years ago but has some merit in the market place today.

https://en.wikipedia.org/wiki/The_Market_for_Lemons

It will also get more complicated when people mix and match real with fake stuff, since few people (especially kids growing older selling their toys, or parents selling stuff after the kids move out of home) who bought or have a mix of genuine and fake will know or care how to identify and split it up and sell it accordingly, because why would any potential buyers care any more than they do themselves.

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It is just like when someone buys a LEGO block collection and there are Mega Blocks mixed in.  Same idea.  The true LEGO guy does not want those Mega Blocks. I have watched videos people going to a goodwill or salvation army (United States donation centers where you can buy people donated goods and the profit goes to help an organization) and they buy a bag of LEGO, come home sort it out and find that a large portion of the bag was Mega Blocks and they end up donating it back to the store, because who wants that, right?

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It depends on the person you are.. If you wanna support the company and stay true to the spirit, you buy the real deal.if you wanna have a nice time, you can buy whatever you want.Its a bit of a flawed logic considering knockoffs are generally bad towards a company, but with something like lego, sometimes the price is too high..

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A factor that could depreciate the value of recent Technic sets is a change of Power Functions. Suddenly all recent sets, will look old. A bit similar to the studded/studless period. In particular flagship sets and limited editions keep their value and can increase to crazy prices when still sealed. I have for instance decided to give up on obtaining the 41999 because it has just become too expensive for what you get.

When you find an extreme good offer of a new set, it could be interesting to buy this set and resell it later. This way you finance other Lego Technic purchases.

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2 hours ago, ThatOneBuilder said:

It depends on the person you are.. If you wanna support the company and stay true to the spirit, you buy the real deal.if you wanna have a nice time, you can buy whatever you want.Its a bit of a flawed logic considering knockoffs are generally bad towards a company, but with something like lego, sometimes the price is too high..

The point I was making, just like the original economics paper, is that as a buyer you often don't know what you're getting. This isn't flawed logic. Even if you have a desire to buy the real stuff, how many times have you bought used collections of what was advertised as "lego" only to find quantities of knockoff stuff in the contents. If you're talking about depreciation, as soon as you get a market loaded with sellers pushing stuff as "lego" regardless of what it actually is, then the value of everything (even the real stuff) goes down when buyers can't really be sure of what they're getting, or don't even care what they're getting and buy on price alone. After a while, people can't move their genuine stuff for realistic money, so they give up and stop trying to sell it. That's the theory anyway.

In practice, some buyers and sellers are not completely ignorant so you maintain some market for genuine stuff, but ultimately the value of the good stuff as a whole drops as a result of the crap being sold. 

If you're only buying for pieces, you have to be concerned you're only getting genuine (otherwise you're paying premium money for junk). As a seller of genuine stuff, you've now got to be concerned about potential buyers who would not have had a choice in the past, looking at knockoff stuff at a third of the price of what you want for the genuine, not knowing or caring about the difference and buying the cheaper one.

as an example: An original used 5571. now 21 years old and hard to find even as used. And that's if you'r comfortable buying from ebay in Germany. Hundreds of euro plus shipping, and that's for one without instructions!. 'new' knockoff from china? Delivered for USD80.

or an 8258 - current price on bricklink new 500+ USD and second hand 250+ USD. And you'll need to add post, insurance and possible payment and import fees to that as well. You can have a 'new' one delivered from china for two digit dollars. (I found one for USD85 delivered at first search). And in the technic world we're sad because you can't even tell if many of the parts are genuine because even the originals don't have details cast into the parts.

Given the advertising even includes the phrase Lego 8258, what do you think the second hand market is going to look like in a few years when the buyers of those knockoff sets start selling them even in competition to the chinese who will probably still be selling the same thing even then!

There will be a hundred people like me with a genuine 8258 to sell, 50 buyers, only 2 of whom care about getting a 'real' one. Suddenly, 100 genuine sellers are not competing for 50 buyers. They're competing for 2 buyers because the other 48 all went the knockoff route.

Edited by bonox

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2 hours ago, bonox said:

The point I was making, just like the original economics paper, is that as a buyer you often don't know what you're getting. This isn't flawed logic. Even if you have a desire to buy the real stuff, how many times have you bought used collections of what was advertised as "lego" only to find quantities of knockoff stuff in the contents. If you're talking about depreciation, as soon as you get a market loaded with sellers pushing stuff as "lego" regardless of what it actually is, then the value of everything (even the real stuff) goes down when buyers can't really be sure of what they're getting, or don't even care what they're getting and buy on price alone. After a while, people can't move their genuine stuff for realistic money, so they give up and stop trying to sell it. That's the theory anyway.

<...>

Umm.. I was saying that what I said was flawed logic.. :tongue:But you bring out some really nice points here! A company always has to compete with knockoffs, which is really sad and yes, about 80% of people dont really care about what they are buying. I guess sometimes you cant help it as most people just buy it as a past time and are not keen on it but it really hurts the market for those who care, like you said.

I have never bought used as where I live there is either nobody selling used or the used is so obscenely expensive that no one can afford it, so I cant really relate to what you said :-(

But it does make sense, considering that a lot of sellers these days are not truthful and in a money-minded society like we have, no one can help it :sceptic:

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