My One-Way Transition from Investor to Seller

[glenbart]

Some people have hopes and dreams, some people have ways and means....

[Gondorian]

Some people have hopes and dreams, some people have ways and means....

 

Please can you elaborate on that to keep this thread useful.

[legodelorean]

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

[legodelorean]

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!

I have been doing that.  I have a little memo pad and write down the price of the set plus tax and the total of money spent.  I do this for other investments as well.  It helps me see what I have spent and how much profit I'll make once I sell and calculate the numbers.

[Jimking23]

Gondorian, I would like to thank you. I think your honest posts have been a great service for the BP members, Especially us newer ones. I wish you the best of luck in the future.

[legodelorean]

I agree.  Good luck in the future and I hope everything works out for you as well.

[Gondorian]

Update: I've sold 21 sets now, but have slowed down on the eBay listing while I log all the prices I paid for all the sets I own (nearly 1000).  I'm going through in set number order and have made it up to 79001!  When I'm done, I'll be able to see the potential ROI on each set based on what I spent and current lowest eBay Buy-It-Now prices, helping me to decide in what order to list things and at what price.

 

Damn, I really wish I'd logged all the prices when I was buying them. This is taking ages!

 

EDIT: And I've still managed to avoid buying any Lego, despite the classic spaceman promo on Lego.com!

[Spartikis]

There is a lot more to Lego investing that just buying sets, sadly most people dont realize that and as a result people either get burned or like you are describing get over whelmed and just dump their entire collection on someone for retail prices. For me i keep it much smaller around 100 sets, no more than 1-2 sales a week and i reinvest the original capital and then use the profits to buy legos or fund other hobbies which aren't cost neutral.

 

I do agree that 1 hour per set is a fair estimate and is what i assume, that includes, searching for the deals, buying, placing it in a closet, listing it, packing it, driving to the post office and any other misc activities. This is the reason why i dont touch sets under $50, its just not worth my time. Maybe if I was unemployed or a stay at home dad or something i would but my wife and i work way to much i cant spend another 10-20 hours a week selling Legos, i try and keep it to 1-2 hours a week max. I also make a large salary so if im not making at least what i would at the office why bother? if i need the extra cash i can just work a couple hours of overtime, but the sets invest in typically net me $50-100 profit, thats not bad for an hour worth of work done in my home on an activity i enjoy.

[Gondorian]

Hey, so I finally finished my list of sets with prices I've paid.

 

I've spent

[legodelorean]

Hey, so I finally finished my list of sets with prices I've paid.

 

I've spent

[waddamon]

Hey, so I finally finished my list of sets with prices I've paid.

 

I've spent

[Spartikis]

Update: I've sold 21 sets now, but have slowed down on the eBay listing while I log all the prices I paid for all the sets I own (nearly 1000).  I'm going through in set number order and have made it up to 79001!  When I'm done, I'll be able to see the potential ROI on each set based on what I spent and current lowest eBay Buy-It-Now prices, helping me to decide in what order to list things and at what price.

 

Damn, I really wish I'd logged all the prices when I was buying them. This is taking ages!

 

EDIT: And I've still managed to avoid buying any Lego, despite the classic spaceman promo on Lego.com!

 

 

Your in GB so it may be different but here in the USA if we go over $20k in sales AND 200 transaction on Paypal they are required to report it to the IRS (tax department) not sure what your rules are but with 28k in lego you might want to stretch that out over a 2 year period to avoid the watchful eye of the gov, or try and do some bulk transactions in person. Also, not sure where you bought them but store credit is nice too, a couple gift cards to Target or your local big box stories is great for buying essentials when your unemployed.

[33Lego]

Update: I've sold 21 sets now, but have slowed down on the eBay listing while I log all the prices I paid for all the sets I own (nearly 1000).  I'm going through in set number order and have made it up to 79001!  When I'm done, I'll be able to see the potential ROI on each set based on what I spent and current lowest eBay Buy-It-Now prices, helping me to decide in what order to list things and at what price.

 

Damn, I really wish I'd logged all the prices when I was buying them. This is taking ages!

 

EDIT: And I've still managed to avoid buying any Lego, despite the classic spaceman promo on Lego.com!

makes me feel you still have money

[Gondorian]

Your in GB so it may be different but here in the USA if we go over $20k in sales AND 200 transaction on Paypal they are required to report it to the IRS (tax department) not sure what your rules are but with 28k in lego you might want to stretch that out over a 2 year period to avoid the watchful eye of the gov, or try and do some bulk transactions in person. Also, not sure where you bought them but store credit is nice too, a couple gift cards to Target or your local big box stories is great for buying essentials when your unemployed.

 

I'm not sure if it's classed as capital gains or earned income (I'm selling off personal possessions, so I think it's the former), but I'll determine the appropriate thing at the appropriate time (January 2016 for April 2014-March 2015 tax year) and pay what I owe then.  For now, I keep all the profits!

 

makes me feel you still have money

 

Money is not so desperate, demonstrated by my wife buying a new baby buggy with the first

[justafrog]

Your in GB so it may be different but here in the USA if we go over $20k in sales AND 200 transaction on Paypal they are required to report it to the IRS (tax department) not sure what your rules are but with 28k in lego you might want to stretch that out over a 2 year period to avoid the watchful eye of the gov, or try and do some bulk transactions in person. Also, not sure where you bought them but store credit is nice too, a couple gift cards to Target or your local big box stories is great for buying essentials when your unemployed.

 

It's better not to advise tax evasion, regardless of government. Regardless of what PayPal is required to report, a seller in the U.S. is required to report their income, including income under $20K and 200 transactions.

 

Just as this site doesn't permit posts advocating scamming retailers (buying a set on sale and returning it somewhere else for full price, for example), I wish they would also not permit posts encouraging people to cheat on their taxes.

[waddamon]

Tax codes can be very different between countries. Not sure what is evading vs. Tax planning in UK. Tax reduction and planning are fully legal and to be encouraged. Tax evasion is criminal. We do tax planning every day in my business.

[segreto]

I sold about 100 items on Ebay.  I once sold a motorcycle.  The last thing I sold was a comic book.  It took more of my time to sell the comic book.  However, once you know all that you have to do in order to get a shipment out the door, it is easier to streamline your process.  Selling 1 item here and there has to be a huge waste of momentum.  Once you develop a process, you can alter and improve it greatly.  You can't expect to be an expert right out of the door.

[justafrog]

Tax codes can be very different between countries. Not sure what is evading vs. Tax planning in UK. Tax reduction and planning are fully legal and to be encouraged. Tax evasion is criminal. We do tax planning every day in my business.

 

Absolutely - however I wasn't talking about the UK and Spartikis was using a US example of tax evasion in his suggestion. The implication was that since here in the US Paypal reports over 20K etc., breaking that into two amounts (sell 10K per year) or selling in person (untraceable cash transactions) are two ways to go here.

 

Those are two ways to go: should you wish to try your hand at tax evasion in the US.

 

Honestly, I don't care what individuals here do - if they want to risk their money and freedom by playing fast and loose with the IRS, that's their business. What I care about is the casual suggestion to commit significant crime that's handed out far too frequently.

 

We can all reduce our investment costs by shoplifting and mugging little old ladies for seed money, too - probably best not to offer those as serious suggestions when folks say, "Hey, how can I get cheaper LEGO?"

[Ed Mack]

It's better not to advise tax evasion, regardless of government. Regardless of what PayPal is required to report, a seller in the U.S. is required to report their income, including income under $20K and 200 transactions.

Just as this site doesn't permit posts advocating scamming retailers (buying a set on sale and returning it somewhere else for full price, for example), I wish they would also not permit posts encouraging people to cheat on their taxes.

We try not to let people promote illegal activities, but it is an active forum and it is difficult to catch everything quickly. We depend upon law abiding members such as yourself to educate other members in the proper methods in selling sets and declaring income.

Sent from my iPad using Brickpicker

[Guest TabbyBoy]

Those in the UK have to declare ALL income that's above the tax-free threshold for a single/married person.  Even if you sold one set at

[waddamon]

In our country the IRS loses data on their hard rives and says, "sorry gone, cannot find it oh well not needed anymore right"?  I expect they will not be litigated against or thrown in prison for losing data that the NSA has on file and should be easily attained.  That is the problem when the rule of law only applies to us minions not our overlords.  Sorry Rant over please continue.

[Gondorian]

Hello, hello.  Just swung by to post an update for those that might be interested.

 

Biggest news: No Lego bought since I made this thread, aside from some sets for my son's impending birthday at the end of the month.  I think I have completely kicked the addiction!  Go me!

 

Other news: Didn't sell anything in August because I was focusing on preparing for our three-week holiday, which we just got back from.  We drove from UK all the way to southern spain and camped two nights on the way.  Did the same on the way back.

 

Recap of where I got to before the holiday ...

 

Total revenue from selling 23 sets:

[r0by76]

I think that - for anyone who is not from the US - the Lego investing could be extremely challenging. This is something I often think about, but after reading Gondorian's posts, I thought to share my feelings with you all.

 

As a foreword, I am a sales executive (I am in the wine business), and I travel abroad a lot. USA is one of my most frequent destinations. This to say that I have a deep knowledge of selling techniques (and I deal with Americans a lot  ). 

 

Said so, whilst I think I am an experienced "seller", I still did not figure out how to make decent and constant profits with Lego in my country (Italy). Our market is infinitesimally smaller than US market in general, and for Lego in particular.

 

We have a plethora of unsuccesful Ebay auctions, because the lack of demand is not driving prices down to more reasonable levels. Sellers are just asking A LOT of money for sets nobody is going to buy at that price. I am not talking about the iconic sets we all know, but even smaller or more recent sets are just too expensive. 

 

Furthermore, the only and unique source of reasonable discounts (30% or more) is Amazon.it. We are missing the "crazy" (for our standards) discounts the US fellows are having almost daily. We are missing Target, Walmart, and the other big and aggressive retailers. B&M clearances do happen, but it is totally random, so, the chances of getting profit from smart buys are fairly limited.

 

The other point is that Lego Movie in Italy was not as succesful as in other countries, and we all know this helped US sales a lot.

 

Finally, I think that European investors should look at US investors profits, resources, storage rooms and inventories in a detached way, otherwise we would just buy too much, and sell too little. We are not selling in the US, and we have to deal with it with no regrets...just a little bit of envy

 

I know that there are other Italians and EU members here, and I would like to hearing their opinion too.

 

Ciao!

Edited September 8, 2014 by r0by76

[10230]

We are missing the "crazy" (for our standards) discounts the US fellows are having almost daily.

A lot of what you wrote is probably true, but don't get fooled by so many "discount reports". Don't forget that the US is also so much bigger than Italy. You could maybe compare discounts in all of Europe to all of the US, and not even that would probably be a fair comparison. "Crazy" discounts don't happen all over the US all the time. You might see one here or there, sometimes, if you are lucky. But this "here or there" spans a quite large country. If I would limit this comparison to "Italy vs. the state I live in" Italy might actually win (or not, but it would be a fairer comparison).

[Neosphinx]

I think that - for anyone who is not from the US - the Lego investing could be extremely challenging. This is something I often think about, but after reading Gondorian's posts, I thought to share my feelings with you all.

 

As a foreword, I am a sales executive (I am in the wine business), and I travel abroad a lot. USA is one of my most frequent destinations. This to say that I have a deep knowledge of selling techniques (and I deal with Americans a lot  ). 

 

Said so, whilst I think I am an experienced "seller", I still did not figure out how to make decent and constant profits with Lego in my country (Italy). Our market is infinitesimally smaller than US market in general, and for Lego in particular.

 

We have a plethora of unsuccesful Ebay auctions, because the lack of demand is not driving prices down to more reasonable levels. Sellers are just asking A LOT of money for sets nobody is going to buy at that price. I am not talking about the iconic sets we all know, but even smaller or more recent sets are just too expensive. 

 

Furthermore, the only and unique source of reasonable discounts (30% or more) is Amazon.it. We are missing the "crazy" (for our standards) discounts the US fellows are having almost daily. We are missing Target, Walmart, and the other big and aggressive retailers. B&M clearances do happen, but it is totally random, so, the chances of getting profit from smart buys are fairly limited.

 

The other point is that Lego Movie in Italy was not as succesful as in other countries, and we all know this helped US sales a lot.

 

Finally, I think that European investors should look at US investors profits, resources, storage rooms and inventories in a detached way, otherwise we would just buy too much, and sell too little. We are not selling in the US, and we have to deal with it with no regrets...just a little bit of envy

 

I know that there are other Italians and EU members here, and I would like to hearing their opinion too.

 

Ciao!

 

The EU markets are running behind US markets. You will undoubtly also have seen on the local second hand sites the explosion of people dealing with Lego. I think we just need to be even more patient then our trans-oceanic neighbours.... but it will come

 

As for the crazy deals. You're right that it also stuns me at what cheap price people from US can sometimes buy a set, but then again, I can not complain about certain prices I paid for some of my investments. It doesn't hurt looking at other countries like Germany. I order alot from sites like TRU and have also started with buying from Amazon.de and the price is cheaper than if I would buy it in Belgium.

 

I think you state correctly not to buy too much. I have a 'rule' of buying 5 of the large sets (SSD,HH, DS, etc) and about 10 of the smaller sets and I'm confident I'll be able to sell them all.

 

Basically....  I said it in the beginning and i'll say it again, you'll need to be patient. Try to sell via other channels instead of moneywolf Ebay. I'm sure there are some national selling sites you can use that are free. Granted ,you won't get the top price, but at least you won't have to pay x% of it to ebay and your customers will see a lower price then what they find on ebay.