The Lunacy of Lego Investors

[jrathfon]

Sounds like a whole lot of "Boo-hoo-hoo" to me. Get a job, get some money and buy what you want! I just sold a PotC Black Pearl in a damaged box for 200$+ that I bought for 30$. Why am I the bad guy for someone willing to pay me?

THESE ARE TOYS!

They are not a necessity to live a complete life. Don't be mad or upset at people who are willing to buy/sell at a higher rate/price than you are.

Like Csacsa 234 said, I really don't care about the people selling GG or CC for $1000. The people who buy out stock on day one of a cool, collectible (even educational) set, just to 1 hour later list at 2-3x the price are killing the hobby. 'Nuff said. I've legitimately tried to buy a few sets right when they have come out, only to be cut off by resellers. It just stinks, so yes, "boo-hoo", what you are saying is Capitalism! We should be subjected to the highest price!

[Mutant Orc]

Sadly there is no way to limit over purchasing to stop lack of stock for RRP. It's more of a problem with Polybags, especially when there is unequal distribution.

No maybe its not a necessity UsernameMDM to buy these things, but for someone who's got a job 'some money' as you put it etc, what's the need in buying stuff to sell it on at a ridiculous price? It's evident that you have money spare to make these purchases and it just denies the less fortunate/wealthy of us some pleasure from an item. And at the end of the day if you're not happy your not healthy. And generating money for the sake of having money is despicable. Money should be used so as to get by comfortably, not to greedily drool over and hoard like a dragon.

Anyway, I think that went a bit off topic somewhere, possibly....

EDIT-Hmm, I was weirdly grumpy yesterday and that sounds anti-capitalist. STRIKE OUT!

Edited May 29, 2014 by Mutant Orc

[Off the wall]

I am one of those who supports the resellers. I only became interested in Lego a couple of years ago. So, I paid reseller prices for Corner Cafe, Market Street, Green Grocer, Eiffel Tower, Taj Mahal, the VW......just glad I don't feel a need for SW sets. I'm glad the resellers are around.

I've always made it a rule to not rationalize any hobby by putting an 'investment' label on it. With that said, clearly some people turn a profit on Lego sets. But, it's not the scale of profit that I'm interested in. Bought Ford stock at under $2 a share back in the financial crisis. That's what I invest in.

[UsernameMDM]

Like Csacsa 234 said, I really don't care about the people selling GG or CC for $1000. The people who buy out stock on day one of a cool, collectible (even educational) set, just to 1 hour later list at 2-3x the price are killing the hobby. 'Nuff said. I've legitimately tried to buy a few sets right when they have come out, only to be cut off by resellers. It just stinks, so yes, "boo-hoo", what you are saying is Capitalism! We should be subjected to the highest price!

The highest price at which a buyer is willing to commit. Yes. It would dumb from a selling standpoint to do anything else. You know for a fact every time you went to buy a set you couldn't get that it was all resellers?

Sadly there is no way to limit over purchasing to stop lack of stock for RRP. It's more of a problem with Polybags, especially when there is unequal distribution.

No maybe its not a necessity UsernameMDM to buy these things, but for someone who's got a job 'some money' as you put it etc, what's the need in buying stuff to sell it on at a ridiculous price? It's evident that you have money spare to make these purchases and it just denies the less fortunate/wealthy of us some pleasure from an item. And at the end of the day if you're not happy your not healthy. And generating money for the sake of having money is despicable. Money should be used so as to get by comfortably, not to greedily drool over and hoard like a dragon.

Anyway, I think that went a bit off topic somewhere, possibly....

Haha. What a load of manure! Less fortunate? Again, THESE ARE TOYS! If you are 'less fortunate' you need to spend your time worrying about other things than toys. How on earth do you know that I am denying anyone anything? As for money, I've worked hard to make it work for me, and I didn't get it by picking it off the money tree. I worked for it, and I earned it. Sitting there feeling sorry for yourself and being 'less fortunate' isn't going to do it. Generating money to have money is NOT despicable; it's smart!

Quit being a sorry-for-yourself-have-not and become a have. It's work and it's fun. It's another aspect of this hobby that I enjoy.

And, as said early, these sets have a shelf life of at least a couple of years. If you can't scrounge together enough money to get the sets you want in 2-3 years, then it's YOUR fault and yours alone. Be smart with your money and get what you want. It only spends once, and you wind up with what you REALLY want even if it it's not what you say you want (ie buying other toys, going to the movies, going out to eat, etc etc).

Edited May 28, 2014 by UsernameMDM

[Off the wall]

Quit being a sorry-for-yourself-have-not and become a have. It's work and it's fun. It's another aspect of this hobby that I enjoy.

And, as said early, these sets have a shelf life of at least a couple of years. If you can't scrounge together enough money to get the sets you want in 2-3 years, then it's YOUR fault and yours alone. Be smart with your money and get what you want. It only spends once, and you wind up with what you REALLY want even if it it's not what you say you want (ie buying other toys, going to the movies, going out to eat, etc etc).

Bravo!

[SMC]

I don't think there is any need to be mad at anyone for trying to sell Lego for what ever price they want, if they are buying as many of a set as they can on day one it is because they know Lego is not going to meet demand, the problem is two fold.

1 Lego not meeting demand or worst still creating crazy demand by a releasing very limited set/figs, Mr Gold, SDCC Figs. If Lego sell out a set so fast like the Mars Rover they should do another production run until everyone can get one. Lego say they don't like the after market but they feed it with there limited set/figs.

2 Its US, buying a set for double RRP when you could get easily get a currant set 30% off and get 3 times as much lego for the same price, if we didn't pay ten times RRP then we would not have this problem. The more people who buy sets to sell on the cheaper they should be as they will be more sets for sale which drives the after market price down.

I think the lesson is for Lego to meet demand and for us to make sure if we want a set we buy it when its still around.

Edited May 28, 2014 by SMC

[glendo]

I think it's a case of 'Monkey see - Monkey do' with a lot of the new-age resellers.

The infamy and price of the CC and MS sets has made most people believe the the GG and FB has the same destiny. People are already aiming to sell these modulars at $1000-1500 price mark. Im sure as we speak people are aiming to stash away a copy of each modular as if they all will go the same way.... Up.

I dont think they will ever reach the prices and value of the CC and MS. People's hype and craze has shot the price of the FB up already, but i suspect that it's a false value. It's price is held that high because people WANT to make a profit on it, whereas the CC is expensive due to natural Supply and demand.

The 10179 UCS MF is a major contributor to the price hype. It's legendary value and fame of how much people will spend on it has everybody trying to recreate the same hype on any and all sets they can.

[jrathfon]

You know for a fact every time you went to buy a set you couldn't get that it was all resellers?

Obviously not everyone's a reseller, but whereas a consumer buys 1, a reseller buys 12. Doesn't take a lot of resellers to diminish stock.

http://www.bricklink...10&searchSort=C (search by highest quantity)

Must be nice sitting on your throne in your castle above all of us. "THESE ARE TOYS!" How is a kid supposed to afford a $30 set for $118?

Edited May 28, 2014 by jrathfon

[rob-cubed]

I like the fact that certain sets gain value after retirement. I spend way too much money on LEGO... so it sure does feel like an investment whether I plan to profit on it or not. If I can sell a retired set I no longer want for 2-3x what I paid for it, great. That's found money to spend on more LEGO. I bought the Simpsons set to build, take apart, and sell in 3-4 years.

I wouldn't be as willing to pay $150+ for a modular that quickly devalued to it's actual worth... which is just a bunch of plastic bits. LEGO has clearly put some thought into the lifecycle and retirement of sets and how that affects the secondary market, and perception of their retail prices. The hard-core "investors" are definitely creating a bit of a bubble for the rest of us, but it's the people paying the high prices for retired sets that are really driving all of this. We can complain about it as hobbyists but ultimately we're the ones responsible for it.

[UsernameMDM]

Obviously not everyone's a reseller, but whereas a consumer buys 1, a reseller buys 12. Doesn't take a lot of resellers to diminish stock.

http://www.bricklink...10&searchSort=C (search by highest quantity)

Build it! Oh wait, you're supposed to do that with Lego?!?!

http://lego.brickins...ory_Curiosity_R

Must be nice sitting on your throne in your castle above all of us. "THESE ARE TOYS!" How is a kid supposed to afford a $30 set for $118?

It is pretty awesome. Maybe I can buy a new cushion for my throne with all the bazillions of dollars I am making for buying up all the North American stock of rare Lego sets and reselling them for kazillions!!!!

Edited May 28, 2014 by UsernameMDM

[jrathfon]

I like the fact that certain sets gain value after retirement. I spend way too much money on LEGO... so it sure does feel like an investment whether I plan to profit on it or not. If I can sell a retired set I no longer want for 2-3x what I paid for it, great. That's found money to spend on more LEGO. I bought the Simpsons set to build, take apart, and sell in 3-4 years.

I wouldn't be as willing to pay $150+ for a modular that quickly devalued to it's actual worth... which is just a bunch of plastic bits. LEGO has clearly put some thought into the lifecycle and retirement of sets and how that affects the secondary market, and perception of their retail prices. The hard-core "investors" are definitely creating a bit of a bubble for the rest of us, but it's the people paying the high prices for retired sets that are really driving all of this. We can complain about it as hobbyists but ultimately we're the ones responsible for it.

I still think there are two arguments out there (besides the "Capitalism" argument):

1. CC, GG, UCS SW stuff: 6-10 year old sets selling for $1000+. This demand is definitely being driven by us hobbyists actually paying these prices.

2. FB, Mars Rover, 41999, etc. new sets being bought up in hoards, selling out quickly, and hitting the secondary market instantaneously at a 2-5X price. Yes, it's unfair(fair in capitalism), but it's being driven by lunacy of speculators, and possibly Lego with Limited Edition sets.

[UsernameMDM]

2. FB, Mars Rover, 41999, etc. new sets being bought up in hoards, selling out quickly, and hitting the secondary market instantaneously at a 2-5X price. Yes, it's unfair(fair in capitalism), but it's being driven by lunacy of speculators, and possibly Lego with Limited Edition sets.

Again, blame the buyers. Sellers sell at the highest price buyers are willing to pay.

[Gooker1]

I still think there are two arguments out there (besides the "Capitalism" argument):

1. CC, GG, UCS SW stuff: 6-10 year old sets selling for $1000+. This demand is definitely being driven by us hobbyists actually paying these prices.

2. FB, Mars Rover, 41999, etc. new sets being bought up in hoards, selling out quickly, and hitting the secondary market instantaneously at a 2-5X price. Yes, it's unfair(fair in capitalism), but it's being driven by lunacy of speculators, and possibly Lego with Limited Edition sets.

Correct - very similar to my previous post. People shouldn't complain about items that fall under the first category. Like UsernameMDM reiterated what I stated, stuff that's easily out there on the shelves for more than a year is fair game. I mean look at the Fire Brigade. How long has that been out? Are you gonna complain if you missed the boat and now you're paying almost $250-300 for one when it was EVERYWHERE for $150 and less two years ago at WalMart? If you do, you shouldn't you were lazy and missed the boat.

Buuuut, for limited stuff like Mars Rover and 41999 Crawler, that's definitely driven by collectors. I won't include Fire Brigade in the bottom half b/c everyone had a chance to grab that set, even had a chance to save $10 a month for 15 mons when it came out and would still not have a problem finding it anywhere.

Again, blame the buyers. Sellers sell at the highest price buyers are willing to pay.

While I agree with some things you mention, that is a narrow-minded view on part 2. Supply and demand, if it's in demand, and it obviously is, if supply doesn't meet the demand b/c speculators, scalpors, investors (whatever you want to call them) have bought all the product, the price will move up b/c of a lack of a supply to meet demand through a usual chain. Secondary market have and can corner the market in a those limited number sets and thus causes the high prices. It's not "blame the buyer" on that.

I have no problem attributing "blame the buyer" if it pertains the first part...ie sets that are/have been readily accessible over a year or two.

Edited May 28, 2014 by Gooker1

[jrathfon]

Again, blame the buyers. Sellers sell at the highest price buyers are willing to pay.

This is where I would disagree with your argument. I believe those "Class 2" sets (Mars Rover being the prime example) are being artificially inflated immediately after their End-of-Life at Lego S@H due to speculation and as the OP suggested "Lunacy".

The set retailed at $29.99. The last 6 months has sold for an average of $54.88 (including international inflation of the price) and is currently being listed for an average of $99.44. So the Sellers are in fact NOT selling at the highest price willing to be paid. The contrary, they are inflating the price. Otherwise why would that stock just sit there? That stock has been about the same for the last 3 months.

[UsernameMDM]

This is where I would disagree with your argument. I believe those "Class 2" sets (Mars Rover being the prime example) are being artificially inflated immediately after their End-of-Life at Lego S@H due to speculation and as the OP suggested "Lunacy".

The set retailed at $29.99. The last 6 months has sold for an average of $54.88 (including international inflation of the price) and is currently being listed for an average of $99.44. So the Sellers are in fact NOT selling at the highest price willing to be paid. The contrary, they are inflating the price. Otherwise why would that stock just sit there? That stock has been about the same for the last 3 months.

And if a buyer buys it at 100$, then it's the buyer's fault. That's how this stuff works. If sellers price it at 100$, and it doesn't sell, then they will eventually lower their prices to a point where a buyer will agree to it.

And again, just look up the instructions online and build the set! I don't see any specialty parts in that build.

[jrathfon]

And again, just look up the instructions online and build the set! I don't see any specialty parts in that build.

That's the point of Cuuso, regularly available parts. But the booklet that comes with a set is also quite nice. You can't bricklink that set for less than $60 including the specialty instruction booklet.

You argue supply and demand, but really what we are arguing is artificial demand based on speculation... aka a bubble. Which is past the $100 Econ 101 argument.

[UsernameMDM]

That's the point of Cuuso, regularly available parts. But the booklet that comes with a set is also quite nice. You can't bricklink that set for less than $60 including the specialty instruction booklet.

You argue supply and demand, but really what we are arguing is artificial demand based on speculation... aka a bubble. Which is past the $100 Econ 101 argument.

Then let the bubble pop! The prices will go down if NO ONE buys! If the prices were low enough that ANYONE would buy, THEN NO SETS WOULD BE LEFT!!! Then who would you blame?

[Gooker1]

If the prices were low enough that ANYONE would buy, THEN NO SETS WOULD BE LEFT!!! Then who would you blame?

If I wanted to assign blame...one Lego, make more than 10k and two the reseller/secondary market for buying all of the sets at $29.99 not allowing more fans to buy it. :)

[zux]

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. In Technic/Model Team there are some decent sets with high price, just because they have some rare pneumatic brackets/flex axles in rare color/unique color bushes/half bushes/panels/wheels/rims etc. Only If I could buy them in any other new set...

[UsernameMDM]

If I wanted to assign blame...one Lego, make more than 10k and two the reseller/secondary market for buying all of the sets at $29.99 not allowing more fans to buy it. :)

The resellers/collectors/hobbyists/kids ALL had the same opportunity to buy, correct? Don't be mad at other people for putting in extra effort to get what they want.

[Ryan H]

This topic caught my eye immediately since my hand is in several of these aspects of the LEGO after market since I primarily buy and sell common used sets, but every now and then opportunity comes up to sell highly collectible sets.

The biggest window of opportunity has probably already passed since there are certain collectible themes like UCS, Landmarks, Minifigures and Modulars that are most likely going to be a continuous theme, and the early sets were retired much more quietly. People get hooked on the newer, more readily available sets and want to go back and complete their "collection." I don't think there is anything necessarily wrong with that, but the Green Grocer buyers certainly have an upper hand since I can't imagine nearly as many units were sold of Green Grocer as the Pet Shop, I imagine. As more and more people have gotten into these themes, LEGO has made new ones more available so the reselling market has dried up a bit. To really profit from speculation you have to guess which new theme will catch on and have sets retired the quickest. If you picked Pharoah's Quest, good luck to you; it's just not a lasting theme, even though the sets are good.

It does seem like you could have a much safer investment in other things than LEGO: a fire could easily wipe out your investment and how are you going to explain that to your insurance company? The space required would be crazy, and space doesn't come free either. You wouldn't want to leave them in sunshine or damp conditions. It's just not a practical long term financial investment. I am not aware of many opportunities to flip within a year or two.

There are certainly bubbles of demand that do occur like The Republic Gunship; for a while set 7676-1 was selling very well for me, but then the price dropped significantly off when the new version of the gunship was released. Just imagine what might happen if LEGO released a better interior-ed version of Green Grocer or Corner Cafe?

The price of what you pay now, I don't think has anything to do with speculation, to be honest. LEGO is a very popular children's toy with millions of buyers that far out weigh the speculators.

As far as retiring sets, they are just keeping in step with the toy industry, in general. The toy industry moves very quickly; and they are trying to stay ahead of any potential competitors.

[Bamos]

You are mad at the wrong people. Resellers don't set the production numbers or the price.

[Gooker1]

The resellers/collectors/hobbyists/kids ALL had the same opportunity to buy, correct? Don't be mad at other people for putting in extra effort to get what they want.

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.

Edited May 28, 2014 by Gooker1

[Faefrost]

You are mad at the wrong people. Resellers don't set the production numbers or the price.

Not completely true. Speculators artificially inflate demand. Which does cause changes in production numbers. And which can cause long term harm for the producers if they are not very very careful. Ideally producers want to produce what the end point consumer market will bear, and not much more. They want their product to effectively go through and off the market. They want their product to reach the point of use.

But speculators interfere with this. They are an untraceable time sink for new product. If 30-40% of your production run is not reaching a use state! and is instead being warehoused to be returned to the market at a later date! then you as the producer have some huge problems. The bubble creates two major issues, it causes the producers to over capitalize his production capabilities and overextend their resources seeking to placate an artificial demand. And then that stockpiled artificial demand product turns around and directly competes in the market with their newer product. They will draw a short term gain from the spike in sales and multiple single customer sales. But at the end of it all. It really burns them.

This is very different from the non speculative aftermarket. Most Bricklink sellers. Those who part out sets. Someone just selling off their old sets. Those are all natural or synergistic things that have no real impact on the producer. They aren't damning up the product stream to dump it into reservoirs for another day. In most cases those type of activities are considered a "value add." Whereas speculative behavior? Not so much.

[ResIpsaLoquitur]

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.