My One-Way Transition from Investor to Seller

[njseale]

I figured I'd post an update for those interested in my trials and tribulations ...

 

Total sets sold now: 17

 

Purchase price:

[glenbart]

Allow 15% for fees, always insure everything, identify a bad buyer before hand, check location, feedback etc. sell for three times what you paid and you've doubled your money plus a bit more for your time. Get into the habit of selling on eBay or elsewhere, if your not planning on selling for a while and have never sold anything start thinking about it. Having standards is a good place to start, items well packed and arriving as sent will mean buyers will leave good feedback and buy again, anything they are not happy with and they will not leave feedback or it will be neutral or negative. If I sold everything I bought last year, now, I'd make money, it would take time & effort and time, but I would make money. Give it till the end of 2015 and my goal of doubling my money plus more is very realistic. Amen.

[legodelorean]

This is an excellent thread. Way too many people concentrate on buying and don't ever try out selling before they are just too deep. I am one of these people and I have long since learned my lesson (I think). For the first year and a half all I did was buy. I bought up over 1000 sets during this time. I would say that I was addicted (still am).

 

The point came where because of money and space it was time to offload some of my sets. In order to buy more I would need to start selling first. So in January of this year I started selling. This was an eye opener. I know everyone says that it takes time to list, sell, package, ship, etc but you really don't understand until you do it yourself. It is very time consuming. You also have to expect there will be problems. Lost packages, buyer returns, etc. This all eats in to your profits and time. I know a lot of people say large sets are the way to go and I agree to a point. Just know that those sharks on eBay/Amazon looking for sets to scam people on aren't looking for small inexpensive sets. I've got burned a few times already and it is always on large sets. A mint condition Imperial Shuttle returned banged up and opened, a Robie House returned destroyed after FedEx left the package in the rain, a AS returned because the buyer "bought it for someone who didn't like LEGO", a Robie House and AS on the way back now for a mystery reason, 0 feedback buyers everywhere, etc. Some of these can be avoided with experience and others are just part of the selling process you have to deal with.

 

And here comes the big one everyone is warned about over and over but never really understands until they sell.... FEES. The fees are much more of an impact on your bottom line than you may think. Make sure you find a good fee calculator online and just play with it a little and enter some values in for sets you have. See what you must sell at to get a certain return on your investment. This is easy and takes just a couple minutes but it will be an eye opener for some who haven't even thought about the selling side of this yet. Make sure you add in estimated shipping costs and add a little for supplies. I know most people don't think about tape, boxes, paper, ink, etc but it adds up very quickly when you start selling at a higher volume. As an example I have spent $40 this year just on packing tape itself.

 

I made the mistake as I am sure a lot of others do of thinking if rough times come or I need the money to reinvest I will just sell a bunch of sets and be fine. The truth is it takes a lot of time for things to sell. Like others have posted its not like selling stock. It will take months before you can sell a large inventory of sets. If you need your money fast you will be basically giving your sets away to sell them fast. Many times I have been the lowest price and still had to wait weeks for the item to sell. 

 

To sum this all up I am still learning but I feel much more confident that I have gone through the selling process and know what is involved. It will actually change your investing and buying decisions. It has drastically changed mine and now I am making more money and spending less time because of it. Since I started selling in January I have sold almost 600 sets totaling just over $37,000. This has allowed me to grow my investment to over 2100 sets and make much better investment decisions. If anyone wants the exact numbers on profits, fees, etc on those 600 sales you can PM me.

 

Buying is only half of the investment process. Make sure you try the other half before you get in too deep. 

Great post, great advice.

 

One thing I do when I sell (not Lego, I haven't sold any yet), is that I don't accept returns or give refunds.  I make sure to state that in red type so it is clear.  I would hate to mail out something super expensive and then have some yahoo open it and jack it all up and then return it.  How am I then supposed to sell it and make a profit?  I always track the item and I don't deal with people who have 0 feedback and are international.  Way too many problems to deal with.

[justafrog]

Great post, great advice.

 

One thing I do when I sell (not Lego, I haven't sold any yet), is that I don't accept returns or give refunds.  I make sure to state that in red type so it is clear.  I would hate to mail out something super expensive and then have some yahoo open it and jack it all up and then return it.  How am I then supposed to sell it and make a profit?  I always track the item and I don't deal with people who have 0 feedback and are international.  Way too many problems to deal with.

 

Where exactly are you selling?

 

If eBay, as it sounds like, you do take returns (or you offer full refunds without requiring a return) - "no returns" only works for certain buyer complaints such as the buyer changing their mind; the first time a buyer opens an item not as described case, you'll find out that you take returns, regardless of whether the item really was as described or wasn't.

 

You also have little to no choice about dealing with people with 0 feedback - you cannot block them, you cannot (within eBay's rules) state that you will not accept their purchase, and if you are in the habit of cancelling their orders, you will find yourself with a defect rate for cancellations beyond what eBay will accept and will no longer be selling there.

 

Amazon is even more stringent.

[KShine]

Where exactly are you selling?

 

If eBay, as it sounds like, you do take returns (or you offer full refunds without requiring a return) - "no returns" only works for certain buyer complaints such as the buyer changing their mind; the first time a buyer opens an item not as described case, you'll find out that you take returns, regardless of whether the item really was as described or wasn't.

 

You also have little to no choice about dealing with people with 0 feedback - you cannot block them, you cannot (within eBay's rules) state that you will not accept their purchase, and if you are in the habit of cancelling their orders, you will find yourself with a defect rate for cancellations beyond what eBay will accept and will no longer be selling there.

 

Amazon is even more stringent.

 

New sellers are just silly - Thinking that they have rights

 

We might also want to mention that a seller is responsible for items lost or damaged in transit (even when the buyer refuses to pay extra for insurance).

[Darth_Raichu]

New sellers are just silly - Thinking that they have rights

We might also want to mention that a seller is responsible for items lost or damaged in transit (even when the buyer refuses to pay extra for insurance ).

Repeat after me: insurance is for the protection of SELLER, not the other way around :)

[sadowsk1]

That is sick man.  I couldn't imagine overspending like that.  I'm surprised I'm not hearing this story from an American since popular media usually states it's American's with credit issues.

[Gondorian]

That is sick man.  I couldn't imagine overspending like that.  I'm surprised I'm not hearing this story from an American since popular media usually states it's American's with credit issues.

 

If you're referring to me, I did actually run up that debt whilst still having sufficient savings to pay it off.  The problem is that paying it off leaves me with very little savings unless I sell the Lego.  Since I now have no job, I might start needing the savings.

 

I suppose I have to decide if the work of selling all this for the revenue I am getting is preferable to the work of just getting and having a new job for the revenue that might give.  I do think there's time to do steady selling and have a job again.  Trouble is that my last job heavily deskilled me and I was depressed for 4 years and occasionally hypomanic (both of which fueled the overspending).  I feel better being out of there, but I still don't feel like I have much to show for those 4 years and I don't think I could impress at an interview right now.

 

I'm spending my days on my own software engineering projects now, trying to get my skills back up again.  Some of those projects might become a business, but worst case I will have confidence in myself again and a portfolio to show off when I do go for another job.

 

Anyway, I guess the point is that you need to stay conscious of where your most valuable resource (time) is going and try to spend it as wisely as possible.

[Guest TabbyBoy]

I feel for you, Gondorian.  I think a lot more of us have buyer's remorse that we would care to admit to.

 

Apart from the most valuable and limited sets, I'm getting out of buying/selling it too.  It hurts when the majority of your "profit" is eaten up by poor EOL performance, postage, fees and tax, not to mention ungrateful buyers that also give you a hard time.  Gone are the days when I visited supermarkets for discounted small/medium sets that are nothing but hassle to sell.  I'll be certainly glad to see the back of eBay perhaps next year when I tell them to stick it.  My problem is that I vastly underestimated the MASSIVE amount of time that listing/packing/posting/resolution takes up.  Even though I've made a few

[Gondorian]

I feel for you, Gondorian.  I think a lot more of us have buyer's remorse that we would care to admit to.

 

Apart from the most valuable and limited sets, I'm getting out of buying/selling it too.  It hurts when the majority of your "profit" is eaten up by poor EOL performance, postage, fees and tax, not to mention ungrateful buyers that also give you a hard time.  Gone are the days when I visited supermarkets for discounted small/medium sets that are nothing but hassle to sell.  I'll be certainly glad to see the back of eBay perhaps next year when I tell them to stick it.  My problem is that I vastly underestimated the MASSIVE amount of time that listing/packing/posting/resolution takes up.  Even though I've made a few

[brickmasterson]

Just think what would happen if what happened to gondorian happened to everyone at the same time. Ebay horrors.

[Alcarin]

 

Do I regret buying too much Lego to invest? To be honest, yes I do - deeply! That's the price of my addiction in the early days.

 

And I thought I was the only one.... not about regreting to buying LEGO, but about moving on.... I had options and money to spend like 10.000$ into LEGO and only spent around 1000$ + 1200$ on my own collection.... and i am so happy i made that decision... 

[Gondorian]

And I thought I was the only one.... not about regreting to buying LEGO, but about moving on.... I had options and money to spend like 10.000$ into LEGO and only spent around 1000$ + 1200$ on my own collection.... and i am so happy i made that decision... 

 

I think this might be an argument for why the bubble will not burst any time soon.  There are rewards, but they aren't enough for most people, so folks will back away, leaving less supply and the same demand (I can't see demand for EOL Lego going down), which may then encourage more to invest and so on.  It stays in a steady equilibrium.   There could be somewhat of a crash if a bunch all decide to get out in one go though.  That's true.

[Alcarin]

I think this might be an argument for why the bubble will not burst any time soon.  There are rewards, but they aren't enough for most people, so folks will back away, leaving less supply and the same demand (I can't see demand for EOL Lego going down), which may then encourage more to invest and so on.  It stays in a steady equilibrium.   There could be somewhat of a crash if a bunch all decide to get out in one go though.  That's true.

 

Yeh possibly.... it depends on the demand..... supply is growing at pace... but demand on EOL sets is to be seen around late 2016 imo.

[asharerin]

Great post, great advice.

 

One thing I do when I sell (not Lego, I haven't sold any yet), is that I don't accept returns or give refunds.  I make sure to state that in red type so it is clear.  I would hate to mail out something super expensive and then have some yahoo open it and jack it all up and then return it.  How am I then supposed to sell it and make a profit?  I always track the item and I don't deal with people who have 0 feedback and are international.  Way too many problems to deal with.

 

If you accept Paypal as payment then you agreed to a 45 day return policy when you signed up for your account. Next year Hassle Free Returns will be mandatory to sell on ebay USA so you will also be offering free returns to every customer then. 8 defects on ebay over 1 year (unless you sell 400 items every 3 months) and you are permanently banned from selling on ebay (so 4 returns and 4 people asking questions and accidentally opening cases over a 1 year period). Don't kid yourself thinking you have any control over your ebay business and remember it can be taken away at any point in time (same goes for Amazon). This is an EXTREMELY risky business (not mentioned on these boards very often), so never invest hard earned money into it unless you enjoy getting kicked in the teeth. If you are using your own funds you better be looking at very large returns every year to compensate for the very large risk.

[Guest TabbyBoy]

Even though this is hypothetical, this is a thought that frequently disturbs me:

 

10187 - VW Beetle:  15,000 produced

10220 - VW Camper:  150,000 produced

10242 - Mini ~Cooper: 300,000 to be produced

10189 - Taj Mahal: 20,000 produced

10214 - Tower Bridge: 150,000 produced

10182 - Cafe Corner: 25,000 produced

10211 - Grand Emporium:  300,000 produced

10179 - UCS MF: 10,000 produced

10221 - UCS SSD: 150,000 produced

 

Also those newer sets now have a much longer shelf life than before meaning less people miss out at RRP.

 

The above "possible" massive increase in production must have an adverse affect on post EOL prices due to mass hoarding and eventual market flooding.  I believe the above could be partly true due to massive factories opening on a reguar basis.

 

One thing hurting us is distance selling rules in the UK for a BIN item (not auctions) where it's COMPULSORY to offer a returns poiicy even if there's nothing wrong with the item.  More and more buyers now return stuff just for the hell of it.

[Guest TabbyBoy]

If you accept Paypal as payment then you agreed to a 45 day return policy when you signed up for your account. Next year Hassle Free Returns will be mandatory to sell on ebay USA so you will also be offering free returns to every customer then. 8 defects on ebay over 1 year (unless you sell 400 items every 3 months) and you are permanently banned from selling on ebay (so 4 returns and 4 people asking questions and accidentally opening cases over a 1 year period). Don't kid yourself thinking you have any control over your ebay business and remember it can be taken away at any point in time (same goes for Amazon). This is an EXTREMELY risky business (not mentioned on these boards very often), so never invest hard earned money into it unless you enjoy getting kicked in the teeth. If you are using your own funds you better be looking at very large returns every year to compensate for the very large risk.

 

eBay's days are numbered I think and as soon as we find an alternative, the better.  It's just a matter of time as sellers are getting really pissed off with eBay's anal, rules, hikes in fees and FVF on postage.  I'm really looking forward to telling them to shove my thousands of feedbacks at 100% up their arses and go out with a bang.  Most of my stuff is now sold locally and through word of mouth with no problems at all.

[Quacs]

Even though this is hypothetical, this is a thought that frequently disturbs me:

10187 - VW Beetle: 15,000 produced

10220 - VW Camper: 150,000 produced

10242 - Mini ~Cooper: 300,000 to be produced

10189 - Taj Mahal: 20,000 produced

10214 - Tower Bridge: 150,000 produced

10182 - Cafe Corner: 25,000 produced

10211 - Grand Emporium: 300,000 produced

10179 - UCS MF: 10,000 produced

10221 - UCS SSD: 150,000 produced

Also those newer sets now have a much longer shelf life than before meaning less people miss out at RRP.

The above "possible" massive increase in production must have an adverse affect on post EOL prices due to mass hoarding and eventual market flooding. I believe the above could be partly true due to massive factories opening on a reguar basis.

One thing hurting us is distance selling rules in the UK for a BIN item (not auctions) where it's COMPULSORY to offer a returns poiicy even if there's nothing wrong with the item. More and more buyers now return stuff just for the hell of it.

Just to clarify - the above is a speculative scenario that causes you concern, correct?

If not, please share with us where you found Lego production numbers.

Sent from my iPhone using Brickpicker

[Guest TabbyBoy]

Just to clarify - the above is a speculative scenario that causes you concern, correct?

If not, please share with us where you found Lego production numbers.

Sent from my iPhone using Brickpicker

 

As I said, hypothetical.  But, it wouldn't surprise me if these numbers were close.  Obviously there is far greater and more widespread supply these days.  Persoanlly, I've never found any current Lego set "Hard to find" or truly "Exclusive" as Lego often state.

 

It should read:

 

"Extremely easy to find"

"Exclusive at Lego and 100 other retailers"

 

If I knew actual numbers, I'd happily spill the beans and I'm surpised nobody has yet.

[Gondorian]

As I said, hypothetical.  But, it wouldn't surprise me if these numbers were close.  Obviously there is far greater and more widespread supply these days.  Persoanlly, I've never found any current Lego set "Hard to find" or truly "Exclusive" as Lego often state.

 

It should read:

 

"Extremely easy to find"

"Exclusive at Lego and 100 other retailers"

 

If I knew actual numbers, I'd happily spill the beans and I'm surpised nobody has yet.

 

Production is likely up.  TLG has been reporting growing sales for years.  But if the market is bigger (which I think it is) then the demand for EOL sets should still be there.

 

To steer the subject back to sharing advice ...

 

I recommend keeping track of what you paid for each thing you buy when you buy it.  I never did that and now I am having to go back through old order emails to find the purchase price of each thing to determine what the ROI is.  Tracking your spending also keeps you more conscious of it and it's more likely to put the brakes on an addiction or just slow you down.  I maintained a GDocs spreadsheet of what I was buying for a couple of months (June - August 2013) but I was buying faster than I had the time to update it.  That was a clue something was wrong!

[46andTWO]

Even though this is hypothetical, this is a thought that frequently disturbs me:

 

10187 - VW Beetle:  15,000 produced

10220 - VW Camper:  150,000 produced

10242 - Mini ~Cooper: 300,000 to be produced

10189 - Taj Mahal: 20,000 produced

10214 - Tower Bridge: 150,000 produced

10182 - Cafe Corner: 25,000 produced

10211 - Grand Emporium:  300,000 produced

10179 - UCS MF: 10,000 produced

10221 - UCS SSD: 150,000 produced

 

Also those newer sets now have a much longer shelf life than before meaning less people miss out at RRP.

 

The above "possible" massive increase in production must have an adverse affect on post EOL prices due to mass hoarding and eventual market flooding.  I believe the above could be partly true due to massive factories opening on a reguar basis.

 

One thing hurting us is distance selling rules in the UK for a BIN item (not auctions) where it's COMPULSORY to offer a returns poiicy even if there's nothing wrong with the item.  More and more buyers now return stuff just for the hell of it.

WOOT! Let's all make up production numbers   Someone start a new thread please.................................

[weakside]

Production is likely up.  TLG has been reporting growing sales for years.  But if the market is bigger (which I think it is) then the demand for EOL sets should still be there.

 

To steer the subject back to sharing advice ...

 

I recommend keeping track of what you paid for each thing you buy when you buy it.  I never did that and now I am having to go back through old order emails to find the purchase price of each thing to determine what the ROI is.  Tracking your spending also keeps you more conscious of it and it's more likely to put the brakes on an addiction or just slow you down.  I maintained a GDocs spreadsheet of what I was buying for a couple of months (June - August 2013) but I was buying faster than I had the time to update it.  That was a clue something was wrong!

Good luck on selling the rest of your inventory Gondorian and the job prospects.  Like many others, from day one I've kept a detailed record of what I paid, taxes/final cost, what I sold a set for and the ROI after fees.  As the net 'profit' column increases it does give some comfort...but when you go on a buying binge and see your inventory cost/value go up $100's-$1000's quickly it serves as a reminder to watch out if you're carrying too much stock for your own comfort and budget. 

 

I would personally recommend new investors to try selling sets as they go along too...get selling experience with perhaps smaller/med sets first and also use the profits towards future purchases/investments.  Basically, what I do is take my net profit # and divide it by my total inventory value...it's nice to see that % get higher and higher.  Profits help fund my hobby.  And since I enjoy this hobby (currently) I don't really think about the hrs put in or else it's definitely lower than min wage as others have mentioned haha.  it's good to have hobbies and with Lego, if you don't take it too seriously it does have rewards.  I wouldn't have the guts/patience to store my sets for 2yrs and not sell a single set.  For example, I'm more comfortable having $10k value of Lego in stock with $4,000 in profit flipping already than no profits and $15k-$20k of stocking appreciating but sitting there.  To each their own.  If you have longer term goals than you would obviously HOLD...but comes with greater risks too.     

 

I may be losing appreciation value but like to see some returns along the way and also serves as a indicator if I enjoy this hobby too before I potentially go over my head/comfort zone.  Just my 2 cents.    

[Guest TabbyBoy]

I think some of you need to look up "Hypothetical" in the dictionary. ;-)

[redeemed763]

It is fun and easy to buy, but despite the work, the selling part is where you get paid, to me, thats what is fun!

[Ed Mack]

Even though this is hypothetical, this is a thought that frequently disturbs me:

 

10187 - VW Beetle:  15,000 produced

10220 - VW Camper:  150,000 produced

10242 - Mini ~Cooper: 300,000 to be produced

10189 - Taj Mahal: 20,000 produced

10214 - Tower Bridge: 150,000 produced

10182 - Cafe Corner: 25,000 produced

10211 - Grand Emporium:  300,000 produced

10179 - UCS MF: 10,000 produced

10221 - UCS SSD: 150,000 produced

 

Also those newer sets now have a much longer shelf life than before meaning less people miss out at RRP.

 

The above "possible" massive increase in production must have an adverse affect on post EOL prices due to mass hoarding and eventual market flooding.  I believe the above could be partly true due to massive factories opening on a reguar basis.

 

One thing hurting us is distance selling rules in the UK for a BIN item (not auctions) where it's COMPULSORY to offer a returns poiicy even if there's nothing wrong with the item.  More and more buyers now return stuff just for the hell of it.

Hypothetically, I understand your worry.  In reality, I don't see such extremes.  I think total numbers of a particular newer set produced is much less than your ratio to the older sets produced.  We all know there are more resellers in the marketplace now.  How many more is unknown and how many sets they buy and hoard is also unknown.  Only LEGO knows what they produce, so that is an unknown.  What is known is the amount of LEGO sets that are available at retail annually...

 

2013...LEGO listed 680 different sets to sell

2008...LEGO listed 429 different sets to sell

 

Almost a 60% increase!  While more sets of each variety might be produced, I don't see the 30,000 to 300,000 increase in sets produced.

 

Now even with "hypothetically" 60% more resellers, there are 60% more sets(and different) sets to sell, so it's a push.  The problem arises when there isn't 60% more "buyers" for those sets.  I think LEGO does a good job of limiting production and keeping their product lines new and fresh.  If they decide to stop their usual patterns of EOL, then all bets are off.  But I think LEGO realizes that the majority of sets need to be retired at regular intervals, so I am not worried yet.  I think we all focus too much on a handful of sets, while in the meantime tens or hundreds of others sets are getting retired with regularity.