Getting the ball rolling on Lego reselling

[inversion]

Historically small and medium sets generally have a higher CAGR than large sets.

What I observed is that they might have, but with a much higher variance.

 

Small/medium sets are the riskier start-up stocks and large ones are the traditional blue-chip ones. Objectively neither of them dominates the other, only personal preferences over risk decides which one to get.

[KShine]

What I observed is that they might have, but with a much higher variance.

 

Small/medium sets are the riskier start-up stocks and large ones are the traditional blue-chip ones. Objectively neither of them dominates the other, only personal preferences over risk decides which one to get.

 

For this particular seller (looking for a quick $10 flip), the larger sets would likely run the greater risk (as shipping costs to certain buyer locations could turn many of these small profits into losses).

 

I buy/sell every type of LEGO, but I still find the large sets to be more headache than they are generally worth.

[inversion]

For this particular seller (looking for a quick $10 flip), the larger sets would likely run the greater risk (as shipping costs to certain buyer locations could turn many of these small profits into losses).

 

I buy/sell every type of LEGO, but I still find the large sets to be more headache than they are generally worth.

However in terms of flipping using 'CAGR' as a reference doesn't make any sense. To flip you need volatility in prices and low transaction costs (shipping here), the underlying CAGR won'T really influence your profits in the short term.

Edited February 8, 2015 by inversion

[asharerin]

My question is.... Is it common to profit about $10 per set? So far that's been my reality.

 

For instance, I bought a Lake-town Chase for $40+tax at WM a few weeks back. Just sold it on Amazon for $73 (including SH). After fees and shipping I'm anticipating netting approximately $10 profit.

 

I have made about $150 in one month but am sitting on around $2500 in inventory. I can't keep up this kind of spending so I have to turn inventory over if I want to purchase the next discounted find.

 

Anyone have any advice based on what I have shared?

 

With your current business model it appears you are creating more value for Amazon shareholders than you are for yourself. Many sellers do it and $10 per set or less is very common in this scenario. My advice is to figure out what your long term financial goals are for this space and see if your current business model will get you there. If not then time to change it up. 

[KShine]

With your current business model it appears you are creating more value for Amazon shareholders than you are for yourself. Many sellers do it and $10 per set or less is very common in this scenario. My advice is to figure out what your long term financial goals are for this space and see if your current business model will get you there. If not then time to change it up. 

 

In my opinion, If ebay, amazon, and the USPS are making more from your work - you are doing something very wrong.

[asharerin]

I would not necessarily call it wrong. Alot of resellers do this as an enjoyable hobby and do not rank profits as a priority. $10 profit or break even is perfectly acceptable in these cases. 

[jaxman]

Your ToO @ 199.95 could have been $189.95 (or at least one of them) if you are using Lego Store for purchases.   A steady stream of purchasing big sets direct lowers cost basis by 5%, enhancing CAGR.  But I'm preaching to the choir.

[biniou]

this hobby or whatever you want to call it is absolutely NOT for the impatient.

 

It depends of what you call "impatient".

 

 

The flipping method of reselling takes much more vigilance and effort but if done often and correctly it can be quite lucrative. If takes perfect timing for obtain maximum profit.

 

Yes, if you're patient enough to wait for 4 months, you can make some money easily (ok, you will miss lots of boats, but you'll be able to jump aboard some)

 

You don't need to quick flip if you know the lego retirement dance a little.

 

Example.

 

The RRP of the Technic 42006 excavator is $80. You buy some on amazon with 20% off ($64) on October 2014.

 

Now that Xmas 2014 sales have absorbed all the last sets (amazon, lego shop, toys'r us, etc.), and because it's typical for technic sets to be unavailable around Xmas, two years after their launch (this one is a 2013 set)... you can resell them for (about) 20% more than RRP on ebay (for example) on February 2015.

 

Consider ebay and paypal fees, and you'll see it's easy to make $20, with a set bought $64.

So a ROI of 30% (you invest $100 and earn $130, but in the case of the 42006 excavator, it's even more).

 

Of course, if you wait for Xmas 2015 you'll be able to earn even more money, but what I mean that you don't have to wait for 2 years to make some profits. Little profits, ok, but still appreciable considering the few time you'll seat on your sets.

 

edit:

Oh and very small sets (minifigs series, mixels...) have a shorter lifespan so if you can get some with some discount you can make some really nice profits (for example, some mixel mini-series like "the 3 blue characters from serie 2", or "the 3 greens from serie 3", etc...)

Edited February 8, 2015 by biniou

[vexxet]

It depends of what you call "impatient".

 

 

 

Yes, if you're patient enough to wait for 4 months, you can make some money easily (ok, you will miss lots of boats, but you'll be able to jump aboard some)

 

You don't need to quick flip if you know the lego retirement dance a little.

 

Example.

 

The RRP of the Technic 42006 excavator is $80. You buy some on amazon with 20% off ($64) on October 2014.

 

Now that Xmas 2014 sales have absorbed all the last sets (amazon, lego shop, toys'r us, etc.), and because it's typical for technic sets to be unavailable around Xmas, two years after their launch (this one is a 2013 set)... you can resell them for (about) 20% more than RRP on ebay (for example) on February 2015.

 

Consider ebay and paypal fees, and you'll see it's easy to make $20, with a set bought $64.

So a ROI of 30% (you invest $100 and earn $130, but in the case of the 42006 excavator, it's even more).

 

Of course, if you wait for Xmas 2015 you'll be able to earn even more money, but what I mean that you don't have to wait for 2 years to make some profits. Little profits, ok, but still appreciable considering the few time you'll seat on your sets.

 

edit:

Oh and very small sets (minifigs series, mixels...) have a shorter lifespan so if you can get some with some discount you can make some really nice profits (for example, some mixel mini-series like "the 3 blue characters from serie 2", or "the 3 greens from serie 3", etc...)

I dont get why people call it the retirement dance.... well... i do, but to me it seems more like the throes of death.  last gasps of air/life desperately clinging to the false hope of getting restocked... lol

[buidee]

I would take back all the wallmart discounted stuff and go for a red 5/ pet shop / palace cinema / ewok village / EEE.

 

I see the porftolio as too narrowly based themewise and you definitely want some SW or modulars too.

I believe in long term investments and you can't go wrong with the exclusives which are suspected of retiring like TOO, EEE, red 5, possible modulars like PS and PC.

But the exclusives are very expensive and take up a lot of room for storage

Good luck

[Ciglione]

Small profits are normal when you just start off. You can be happy even selling something so early in the game. In my experience the profits will get more the longer you wait and the more experience you gain. Patience indeed is the key. Together with buying as cheap as possible. This hobby can be very frustrating from time to time. Especially at the start. It seems like you are only pumping money into lego sets and get nothing in return. But after a while when your stash is ripe you can harvest the fruits. Do not sell too early for $10 profits. It happened to me and now I punch myself in the face. 

 

Good luck! But not too much. 

[Copterman]

Just wanted to share an update since you were all so helpful in getting me started. Here's how things stand since I posted this cry for help exactly one month ago:

 

Total profit since I started in January - $714.89

QFFL inventory on hand - $737.28

Long terms holds - $647.87 (my plan is to use my profit to invest in these kinds of sets; rinse and repeat; trying to build a self sustaining business)

 

My long term holds are at present are:

ToO x 2

WVM x 2

 

I'm saving up to buy the EEE before it retires I think.

 

Thanks for helping a newbie out. My next big challenge is navigating to EOL purchase and resale bit.

[diablo2112]

Good job!  You have a clear plan, that's the best start possible.  Good luck with your goals.