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  • Scarcity Breeds Demand: Lego Set Case Studies

    Veegs

    By Veegs

    With so many total sets available and #chaos in full effect as predicted by J-Mack, I thought it would be useful for new(er) members to the site and to Lego investing on the whole to take a look at how a short or shorter than expected run can greatly impact the value of a set. Without further adieu...

    brickpicker_set_4204-1_1.jpg

     

    The Mine 4204 June 1st, 2012 – Nov. 29th 2014 CAGR: 0.05%

    I loved 4204 The Mine. It had a lot going for it (at least in my eyes) – cool subtheme, unlikely to be remade, and lots of potential buyers seem to like construction vehicles and sets in non-technic sets. I'm sure they like them in Technic, too, but based on sets released, traditional sets seem more popular and sell more. I got a great deal on a whole bunch of them about one and a half years in, and hoped to see it retire around the two year mark. Sadly, either more sets were produced or not enough folks were buying at MSRP because it lingered for about two and a half years. Unfortunately, the brickset.com dates also only indicate the date at which it became unavailable from Shop at Home, but I can assure you that Toys R Us in Canada still had stock into early 2015. I like a varied portfolio, I'm a big believer in the right CITY sets, but the shelf life hurt 4204 in my opinion. Currently Brickpicker lists its US value at essentially MSRP. Granted, it was a CITY set, so if you didn't get it at a good discount you can only blame yourself, but profit potential seems to have been crimped by availability from 2012 into 2015.

     

    brickpicker_set_60022-1_1.jpg

    City Cargo Terminal 60022 Aug. 1st, 2013 – Dec. 12th, 2014 CAGR: 15.97%

    In comparison, another large CITY set, 60022 Cargo Terminal, was available from Shop at Home for under eighteen months, total. Massive difference for another subtheme I liked and thought was cool. With a current BP value of around $155 USD, plenty of extra room to visit profit land and frolic in piles of solid returns. With CITY sets, I'm not really looking for a set to hit the stratosphere, but I find they can be steady workhorses that reliably net returns – great for mixing it up. That being said, a couple of other sets I want to focus on had even shorter runs than 60022 and have exceeded likely every investors' expectations. (I call BS if investors claim they knew The Zombies was going to break through $200 USD on launch day or even as it started to become a little hard to find)

     

    brickpicker_set_60059-1_2.jpg

    Logging Truck 60059 Dec 2013 (Jan 1st 2014 wide release) to Dec 15th 2014 CAGR: 67.27%

    Cool vehicle from a sometimes overlooked theme. Add approximately one year of availability, stir, and watch the money come in. Enormous ROI%, even at MSRP, but pure gravy for those with the foresight to get some of these at 20% off or more. The size of the set really helps the CAGR percentage, which is great for new investors who are looking for solid short to medium term sets that can really help a small time investor scale up.

     

    brickpicker_set_60064-1_5.jpg

    Arctic Supply Plane 60064 Aug. 1st, 2014 to Dec 28th 2014 CAGR: 43.63%

    Crazy short run from a theme most probably though had at least another twelve if not eighteen months. Just now the last Arctic sets have moved to Sold Out at Shop at Home, so quite a big difference. Even though the plane looks a lot like other planes (at least to me) in other City subthemes – like the plane in the Deep Sea subtheme (another Toys R Us exclusive, at least in Canada), it certainly hasn't caused collectors to NOT want to buy this set, even while its brothers and sisters were widely available. With great scarcity seems to come nice gains, even if the set doesn't seem all that amazing.

     

    brickpicker_set_76039-1_4.jpg

    Ant-Man Final Battle Jun 1st, 2015 – Oct 15th, 2015 CAGR: 25.66%

    Seems to be in a nice initial growth phase. Even with some chatter about this set and investors jumping on the bandwagon, the lack of new supply will likely only keep prices in relative check for a short time. Great minifigs and a very short run, plus upcoming screen time in new movies means a lot of potential. Despite knock off Superhero minifigs being an issue – and many superhero set builds being underwhelming – there is still money to be made on the right sets. Also spoiler alert the 2016 summer Superhero sets look a lot more desirable overall, so perhaps this is a good time to try out this theme (or revisit it, if you've been avoiding it in the post 6866 world). Plus, this is a crazy short shelf life for a set, even if it had issues at launch.

     

    Snowplough & Excavator and Others...

    The whole Demolition line seemed available on sale over the holidays, at least around me, but the Excavator seems to be the exception. Brickset lists it being available from Dec. 2nd, 2014, but general release (I believe) was Jan. 1st, 2015. A retail life under a year and from a cool subtheme, I think this might surprise in the next six to twelve months. Toys R Us Canada has them on sale right now, 33% off (Jan 29, 2016) and I tend to think this could be an easy double at this reduction with pending official retirement. The Snowplough is even cooler (at least in my opinion) and I think will be a huge draw next winter in places that get snow. Just around a year of availability and well-reviewed on other Lego sites all point to a nice potential profit in the next twelve months and beyond until it hits a plateau

    There are plenty of other sets from other lines, but I have to leave some work for readers to do themselves. I tried to highlight a few I find interesting, but rest assured this isn't a complete list and there are other short-run gems out there to be found. Right now, Hydra Fortresses, Pirates sets and Raptor Escapes are being sought out at retailers. The beauty of the short run sets (or themes...think Castle before and Pirates now...Scooby Doo is my prediction for 2016) is that often online stock dries up quickly and getting more than one or two requires some leg work, stock checking and dragging the kids (or self) to physical stores to mop up the remnants. For me, it is one of the most enjoyable parts of this hobby/business, although I am a self diagnosed masochist who likes the awfulness that retail environments sometimes foster.

    Final Thoughts

    Older investors are probably familiar with a lot of these sets, and earlier ones; the lore of the Zombies and Wolverine's Chopper Showdown are the stuff of investing legend, whispered about whenever two or more investors gather. Keeping a watchful eye on the forums here on Brickpicker as well as Shop at Home should give you enough lead time to go on a buying spree when you see a short run hit sold out. Currently, there are so many lines/themes and waves out there that short run sets seem to be happening with more regularity – or I'm just noticing it more – but they present opportunities that a savvy investor can jump on. If you live in a regional area with a lot of competition (from “normals” buying sets from their kids or, worse, rival Pickers) the chances of short run sets surviving long after moving to 'sold out' are slim, so stay sharp out there!

     

    Veegs

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    dcurve

    Hi Veegs, great story to start the conversation. As an Economist, I do feel compelled to correct your tittle a little. Scarcity (as in Supply) doesn't create demand. It does create higher prices, which is what I think you were after :)

    Having said that, the relative scarcity of a set can raise demand if the news of that scarcity becomes wide spread and the "desire" to hold that set, maybe as a trophy, increases at every level of price. 

    Your idea, just like the recent Sea Cow and the Tumbler, where low levels of production can create low levels of supply combined with either consistent or increasing levels of demand (due to a new movie for example) creates a fantastic investment opportunity. Hence why most of are here and why this site is so much fun. 

    Thanks for your post and the analysis on these sets was great to read. 

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    Veegs
    10 hours ago, dcurve said:

    Hi Veegs, great story to start the conversation. As an Economist, I do feel compelled to correct your tittle a little. Scarcity (as in Supply) doesn't create demand. It does create higher prices, which is what I think you were after :)

    Having said that, the relative scarcity of a set can raise demand if the news of that scarcity becomes wide spread and the "desire" to hold that set, maybe as a trophy, increases at every level of price. 

    Your idea, just like the recent Sea Cow and the Tumbler, where low levels of production can create low levels of supply combined with either consistent or increasing levels of demand (due to a new movie for example) creates a fantastic investment opportunity. Hence why most of are here and why this site is so much fun. 

    Thanks for your post and the analysis on these sets was great to read. 

    Thank you for the kind words and the help with the title. I was hoping to highlight a few sets that might typically not be a hotly debated set (like SC and Tumbler were/are) but can still do well based on limited production. I thought about comparing Wolvie's Chopper Showdown to Power Armor Lex, too. Both great sets (imho) but the longer availability of one really hurt its value - at least in the short and medium term. Remains to be seen what demand will be like in another year for examples like this.

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    dcurve
    1 hour ago, Veegs said:

    Thank you for the kind words and the help with the title. I was hoping to highlight a few sets that might typically not be a hotly debated set (like SC and Tumbler were/are) but can still do well based on limited production. I thought about comparing Wolvie's Chopper Showdown to Power Armor Lex, too. Both great sets (imho) but the longer availability of one really hurt its value - at least in the short and medium term. Remains to be seen what demand will be like in another year for examples like this.

    I hope to see more articles like this. It is a great thought provoker. 

    Good point on the availability. I also think that Deadpool was the prime mover in the Chopper showdown. As far as I know, that set is the only one with Deadpool in it ...

    I would imagine that there is some controversy within Lego if they want to even make any Deadpool sets. The movie content is not exactly kid friendly ... :)

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    steelmelt

    The City great vehicles theme has done well for me.  The Green Garbage truck, the logging truck, the last Ambulance, Airport Fire truck, etc, all have done well.  Some on the under performers, cement truck, and flatbed tow truck, have done mediocre. The benefit to this line is that they are gone in a year, and you have about 2-5 years before they are rereleased.  Also because you can usually get them for around 15 bucks on sale, selling them for $50 on Ebay nets you a decent profit.  They are also very easy to reuse boxes for.   The downside is that they mostly sell around xmas season.  The rest of the year sales are fairly slow.  

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    ZULU

    Nice article! Thanks.

    Just a thought: City sets are mostly avoided by investors. Therefore, they remain longer on the shelves and get a larger discount in the clearance period. Arctic Supply plan was a good example of this. Just one of these opportunities overlooked by 'Pavlow Investors' who look for exclusive sets only (and most of all the "M"'s...)

    :-)

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    thoroakenfelder

    I was putting some thought into this topic since you posted it. Your examples seem to be (for lack of a better term) "investor poison." They're the themes that investors seem to avoid due to historic problems of frequent refreshes and/or rampant bootlegging. So, for those who are interested in dipping a toe in these waters, how do you identify the ones that have a shorter lifecycle? What are the hints to look for? Do you watch sets that seem to linger on shelves and compare the seal codes to see if they are genuinely not being restocked? Do you look for sets that are restocked infrequently, even though the shelves are empty?

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    evoquince

    Thanks for the article!  As a new investor, I'm wondering where are the "best places" to note release dates and retirement dates?  Lego's site seems fine, but is the a more up-to-date place to find that info?

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    redcell

    I was putting some thought into this topic since you posted it. Your examples seem to be (for lack of a better term) "investor poison." They're the themes that investors seem to avoid due to historic problems of frequent refreshes and/or rampant bootlegging. So, for those who are interested in dipping a toe in these waters, how do you identify the ones that have a shorter lifecycle? What are the hints to look for? Do you watch sets that seem to linger on shelves and compare the seal codes to see if they are genuinely not being restocked? Do you look for sets that are restocked infrequently, even though the shelves are empty?

    There is really no way to plan ahead for early retirements. You basically have to guess and gamble or wait for the set to sell out at LEGO Shop at Home and then scramble to buy at other retailers. However, there are plenty of sets that sell out at LEGO Shop at Home and come back so it's all a big gamble.

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    TargetZero

    Well.. sets based on movies, (superheroes I meant) never sold good... look at Batman 76001 and 76003.. slow movers. or x-men 76022.

    Guardiens of the galaxy were slow movers too. Maybe they didn't want to take that chance with jurassic world and ant-man... I don't know.. but  sure JW was a good seller. But seems like store wont get restock of. But eh... who knows. I was really suprised about ant-man being already retired. I saw a pile in a store 2 weeks ago. returned couple of day after and they were all gone. "/%/$%RB"/$!/ I was WTF someone took them all i am pretty sure.. i don't live in a big town. and stuff usually stay there a while and slow move.

     

     

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    EliasFelipe
    1 hour ago, TargetZero said:

    Well.. sets based on movies, (superheroes I meant) never sold good... look at Batman 76001 and 76003.. slow movers. or x-men 76022.

    Guardiens of the galaxy were slow movers too. Maybe they didn't want to take that chance with jurassic world and ant-man... I don't know.. but  sure JW was a good seller. But seems like store wont get restock of. But eh... who knows. I was really suprised about ant-man being already retired. I saw a pile in a store 2 weeks ago. returned couple of day after and they were all gone. "/%/$%RB"/$!/ I was WTF someone took them all i am pretty sure.. i don't live in a big town. and stuff usually stay there a while and slow move.

     

     

     

    I think the superheroes sets just need a little more time. 76000, 76001 are sets that are still available in shops out here. Also the 76022, Still available at 20% under MSRP. In six months they will go sky high...That is when I gathered enuff money to buy the remaining stock of those three sets;) 

     

     

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    torville1976
    On 08/02/2016 at 6:16 AM, evoquince said:

    Thanks for the article!  As a new investor, I'm wondering where are the "best places" to note release dates and retirement dates?  Lego's site seems fine, but is the a more up-to-date place to find that info?

    No, not really. Lego call the shots entirely whne it comes to retirement dates and there are certain sources which give inaccurate information. In reality. Every set will retire at some point. The key question is; "which sets to go for?" My advice is to avoid pre 2005 sets as they tend to lack the detail which we have come to associate with the newer releases. Certain stores will clear stock to make way for new items (which don't necessarily have to be Lego). It's when they heavily reduce sets by a third or even 50% that it's worth snapping some up.

    It's worth noting that Europe tend to retire sets before the US so keep your eyes on the European sites to give you a reasonably good indication.

    Star Wars sets are a really good investment as the franchise is so sought after.

     

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    jeff_14

    I'm not having any problem moving superhero sets at all, and I have bought most of them and usually for a good discount. Much like the comics they're based on, there's always a market for key back issues.

    The Wolverine Chopper was definitely moving because of Deadpool. Even though I sold a lot of those for a 1000% return 2 years ago, now I feel like I missed the boat now that the Deadpool movie is out. Similarly, I'm wishing I bought more of the sets with Harley Quinn the other year as Suicide Squad approaches. They probably won't make any more figures based on her original costume. I've just picked up a few of the X-men and Hydra Fortress sets lately on sale at TRU as they seem to be coming to an end. Great exclusives in these sets, as well as the Darkseid Invasion which I got a few of at Boxing Day. If the rumours are true and Darkseid makes a cameo in Batman vs Superman next month, boo-yah!!! You can't get him any other way.

    On 2/8/2016 at 0:17 PM, TargetZero said:

    Well.. sets based on movies, (superheroes I meant) never sold good... look at Batman 76001 and 76003.. slow movers. or x-men 76022.

    Guardiens of the galaxy were slow movers too. Maybe they didn't want to take that chance with jurassic world and ant-man... I don't know.. but  sure JW was a good seller. But seems like store wont get restock of. But eh... who knows. I was really suprised about ant-man being already retired. I saw a pile in a store 2 weeks ago. returned couple of day after and they were all gone. "/%/$%RB"/$!/ I was WTF someone took them all i am pretty sure.. i don't live in a big town. and stuff usually stay there a while and slow move.

     

     

    Most TRUs are fully reloaded with JW now except for the retired Raptor Escape.

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    Veegs
    5 hours ago, jeff_14 said:

     

    Most TRUs are fully reloaded with JW now except for the retired Raptor Escape.

    This is good for investors who moved JW product during the shortage. It is likely that we'll get sales at some point for a good restock. 

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