Invest in Lego

[Lego Petman]

Is it good idea?I mean buy sets on sale and after 3-4 years sell it via internet.i know it is no simple answer, but i think it can works.Is anybody have an experience?

[Johnny1360]

I think there are easier ways to make money. Also I think a lot of people tell themselves they are "investing" as excuse to buy more Lego, me included.

It is certainly doable but you need to speculate which sets are going to be in demand years later, long term storage, sorting, shipping costs and general internet selling hassles quickly eat into profits. 

Definitely not "easy" money and rapidly takes the fun out of Lego. 

[nicman]

I do this sometimes but does not at all take the fun out of Lego. In fact it keeps me even more interested in the hobby.

[MAB]

Of course it is. Although it is much harder these days due to (i) the number of people doing it, as the more sellers there are and the more secondary market stock there is, the lower the prices you will get and (ii) LEGO are releasing many good sets these days that are similar to previous ones, whether re-releases of old sets (Taj Mahal), similar ones to past sets (UCS MF) or just small sets it is so easy to buy similar sets at retail and this will affect future value now. Modular buildings are probably still a good investment still, but I wouldn't go near common ships in Star Wars or common characters in Super Heroes. They will be done again and again and again. Even modulars are likely to become a poor (at least less good) seller once there are many out and people stop going back so far. Why pay 3x or more for one when there are multiple similar ones at retail?

[Robianco]

I'd think about how much you were going to buy and how long you thought you needed to keep hold of it before it was worth something.

You can never tell if the value of an item is going to hold or by how much it will go up. As others have said here... If you owned a 10179 Falcon you could get quite a pretty penny for it... but after 5-10 years... and that was a big outlay then. Now people are probably going to try and grab the new Falcon... but it will be around for a while... so you could be paying a lot to keep for years... and then not make a great deal. The Death Star is a prime example of that.

Modulars will probably go up in value as others have said... but we've seen Lego sell very similar sets even in the Winter Village line... so there's no guarantee of a set staying high even if it gets up there.

If you want to give it a go then fine... but things that get lowered on sale may end up being those things that aren't selling all that well (hence them sitting on a shelf at then end of their cycle) so how much are you going to make?

I'm always hesitant to join conversations based purely around buying Lego for profit... I genuinely don't care whether people make money or lose it... I'm only bothered by whether people are buying up stock of wanted items to create a demand bubble and scalping people. To those I hope they lose money and lots of it.

If you have spare cash and you want to give it a go then feel free.

[rodiziorobs]

I feel like there are better options for investing that will give you the same return with less work.

For example, I picked up the Ideas Beatles set last year at the Lego store in clearance--20% off ($40). It was a present for my sister, at the best price I could reasonably expect to find at the time.

Now that it is retired, it is selling for north of $60 on eBay, which means that after sales tax, shipping, PayPal and eBay fees, etc, the seller is likely only making a couple bucks. Unless you were moving lots of these babies, your overall profit wouldn't justify the effort as an investment.

Now if you waited a couple years, the price would probably go up, and you might see some decent money there. But maybe you would see the same in traditional investments over the same time period, with definitely less work, less hassle, and let's face it--less risk. For every set that appreciates in value, there are a dozen that stagnate or lose value. Add in the cost of storage, the risk of anything being damaged, etc, and heaven forbid you ever move.

The gold-at-the-end-of-the-rainbow stories of people flipping sets for big $$$$ are tantalizing. Heck, I myself recently tried my hand at selling an exclusive set on eBay for the first time and you know what? I made some decent change, even after the aforementioned costs. However, it was honestly a bit nerve-racking and I would never try and do it in a big way. Occasionally selling a one-off? Sure. Doing it as a real investment? No.

If you have money to invest, start a business, put it in a standard portfolio, or get more education or learn a trade or something; your money and work will almost assuredly be put to better use. Unless of course you're already sitting on a bunch of vintage MISB sealed sets...

[Stash2Sixx]

I look at it this way...there are a lot of people who think they know what they are doing out there, and in truth, they have no clue.  Many people say you can use the websites and online resources available but honestly, I think it's a bust.  If I'm writing one of those pages, or one of these LEGO investors, do you really think I'm going to give you my secret formula for making money, let alone put it out there on the internet?

 

Anyways, that's just my opinion.

[Ghost Onyx]

A friend of mine and I were thinking about doing this some time ago. I didn't go through with it though, not the investment part at least. For the past year, I've been working as more of a middle man. There is a facebook group I joined that serves as a marketplace for buying/selling/trading Lego. People post their own albums of Lego sets they want to sell. There's also one "Looking For" album where people post pictures of the sets they want to buy. All I did was match up the demand with the supply. If there was a set someone wanted and I knew where to get it, I'd match them up. If the sellers were too busy/unable to do the delivery themselves, I'd meet up with the buyer on their behalf and receive a small cut of the profit from the seller. 

Keep in mind that none of this was by any means official and it was just something I did on the side. Also the sellers I knew were other friends of mine. I made money but didn't have to spend any (except for transportation costs). 

But based on my experience, my advice is if you're going to be a local seller, then it's a bust unless you happen to be in very ideal conditions. If you plan to be an international seller, then that's where the real market is. A lot of what I call "the higher up middle men" did this. 

If you can somehow acquire exclusive sets and polybags that are only sold at certain places or events, then I guarantee you there will be a demand elsewhere. Also, Lego is more expensive in certain countries compared to others. I live in the Philippines so sets often retail here for almost 2-3x their value in places like America or sets sold directly on the Lego website. From what I understand, Lego is also cheaper to buy in bulk in places like Singapore or Malaysia or wherever there's a Legoland. 

It's very important to find your market. Find where the demand is and what they want. Set up a nice efficient system for shipping internationally and you should be good to go. It's by no means easy money but I think you'll get a nice profit if you're willing to put in the effort. 

All of this is only based on my personal experience and I still didn't go through with the investment idea, so take that as you will. Consider your options. I wouldn't recommend Lego re-selling as a main source of income. Maybe just a little something on the side to supplement your regular income. 

[ShaydDeGrai]

I think we've all heard stories about how _this_ set really took off, and just the instruction book for _that_ set sells for more than the whole set originally sells for; It makes it easy to think that this a get rich quick scheme where no one could ever possibly lose money - but if that were really the case, we'd all be doing it and we'd all be immensely rich.  Turns out, it doesn't work that way.  There are certainly rare items that command premium prices from people who both desire and can afford them.  According to Bricklink, someone paid close to the price of the original UCS Millenium Falcon just for the two gray lattice pieces that came in it, but these are really the exceptions to the rule (and just because someone ASKS for $10,000 for a Mint condition, unopened Green Grocer on eBay doesn't mean it sold for that).

As a hobby, I think Lego is fantastic.  As a toy that holds its value (both in playability and resale) it's hard to beat.  But as an investment?  It's right up there with comic books and stamps.  People used to go crazy over getting issue #1 of anything, then DC came out with the "New 52" and labeled every issue "number 1".  Certain comics are expensive because they are popular and/or historically important and, most keenly, rare.  When people got excited about "investing in comics" and buying up issues in bulk, the publishers responded by printing more, making everything less rare and less important, and in the long term less valuable.  Even in a field where supply is fixed, like old postage stamps, demand can dwindle. My dad collected stamps all his life, and by the time he passed, his collection was worth a fraction of what he'd paid for it, because stamp collecting is a dying hobby and you have more large collections heading for estate sales than you have people with disposable incomes going to auctions to outbid one another.

So what does this have to do with Lego?  Well, just looking in my closet I see I have the 3739 Blacksmith Shop and 10193 Medieval Market Village (MMV).  Both mint in box; both very popular in their time; both coupled to an evergreen theme (Castle) and both sets that I liked enough to buy extra copies of (apparently). 

According to Brickset, I paid 40 bucks for the blacksmith's shop 16 years ago and now, based on actual bricklink sales it's worth $271, a 578% increase in value!   To put this in perspective, if I'd put that same $40 into an index fund 16 years ago, it would be worth $212 today, so really, over the course of 16 years it really only beat an average (blind) investment by 27% - but hey, if I could find someone to give me a buck and quarter every time I gave them a buck I can still get rich eventually, right?

As always the devil is in the details.  MMV was even more popular than the blacksmith shop.  It's appealing to the same audience, is an even richer set and had a higher MSRP ($100) so clearly I should be able to get even more money for it.  Well, Mint-in-Box, its sales history says its worth about $150, still $50 more than what I paid for it nine years ago, but compared to a $100 investment in the stock market (again just an index fund, no active management) over those same nine years?  The index fund would be worth $256 - over $100 more value while taking up none of my closet space.  

I chose these two sets because I happen to own them both mint-in-box and from a "I'm sure this is going to go up in value" standpoint they are/were very similar.  Both _did_ appreciate (and will likely continue to do so) but compared to something as simple to acquire and manage as shares in an index fund they didn't fare so well.  Taken together, they have a resale value of about $421, compared to $468 which is what I would have today if I'd invested in the stock market the same amount of money the same day I bought these sets.  This doesn't even address the large number of sets that don't show any real appreciation over time (10223 Kingdom's Joust, another lovely Castle set, sold for $120 new six years ago and today commands the staggering price of $125, which, after you account for inflation, is actually about 15% less (in buying power) than the original price).

There will always be stories about an "Inverted Jenny" or "Action Comics #1" fetching some new record high at auction or articles like this one (where by some twist of fate it seems I own 9 out 10 of the them - yea me - didn't realize that until five minutes ago...) but these are lottery fantasies, not an investment strategy.  If you love Lego, play with it. If you're looking to invest, learn about investing and pick a vehicle that balances your sense of risk against your expectations on return (then spend the profit on Lego).   The collectables market is unpredictable, even when you really know the product and while you _might_ turn a profit in an absolute sense, you need to consider time, space, inflation what that same initial investment could have netted you if you'd invested elsewhere.

[fred67]

I bought a lot of sets that shot up in value, but I think it had more to do with the fact I was buying sets I REALLY wanted and so, apparently, did other people.  I wasn't trying to guess what other people wanted, I bought what I wanted.   I became a reluctant investor only because I finally realized I just don't have room to build all these sets, and I never will.  So I started narrowing down the themes I was interested in and concentrating more on building up my city, and trying to sell off the sets I knew I wouldn't use, and it just happened to turn out the vast majority had become quite valuable.  Over the past couple of years I've managed to make some great mutually beneficial trades to get some of the newer city sets.

But as a business opportunity?  Not only is it hit and miss, but it's not all that lucrative, as ShaydDeGrai points out.  Not only is it better financially to invest where it can keep growing, but you don't have to go to the store to do it, you don't have to waste a lot of time and gas, you don't have to take up valuable storage space in your home, which severely limits the amount of sets you can "invest" in.  I think, when you've been buying LEGO for enough time, you get lucky from time to time, and then it's like facebook envy - everybody posts when they get a new TV or Car, or are on vacation.... they don't post about going into debt to buy that new TV.  So you usually only hear the stories about what a killing someone made with a LEGO set, you don't hear all the stories, and you often don't hear the whole story.

And then, think of it this way - a leaky roof can annihilate your "investment," the same doesn't happen in a nice diverse portfolio on the stock market.