$180,000 inventory, $60,000 in sales in 1 year

[lodibricks]

With this 180k to make 60k idea, I think a huge variable is the age of the sets, which I might have overlooked and didn't see mentioned. If all the purchasing was made in the last 3 years, a good portion of would be hard to sell for much more than MSRP.  Of course it also depends on the theme. 180k of Chima to make -10k.

[tyclin]

4 hours ago, redcell said:

I don't think I explained previously, but what I meant was that as your capital base (or the amount that you borrow) grows larger, you have more money to spend on sets and more decisions to make about how to spend that money.  Do you go incredibly deep on a small number of sets or spread your money over a larger number of sets?  How many copies of that modular do you buy now that you have the money to go 50 copies deep if you want?  Etc., etc.  Basically, once you have more money to play with, the possible combinations of how you can spend that money grow...that's what I have found interesting as my business has grown.

Thanks for elaborating. I find that is case too.

[tyclin]

10 hours ago, lodibricks said:

With this 180k to make 60k idea, I think a huge variable is the age of the sets, which I might have overlooked and didn't see mentioned. If all the purchasing was made in the last 3 years, a good portion of would be hard to sell for much more than MSRP.  Of course it also depends on the theme. 180k of Chima to make -10k.

Correct. Majority of the sets were purchased from 2013-2015. Some were older sets with much higher than MSRP buying in but sold with even higher value. Chima probably would be ended up with being donated.

[waddamon]

As an aside my chima performed exceptionally well at a great clearance buy in and sold lightening fast, mainly through the GSP through eBay.

[conceptmachine]

I have my share of chima  but I'm sitting on them for a decade min.

[waddamon]

That is a long time.  I made a decision on chips temple, the others medium sized sets that I have gotten to yet, that knowing when to sell is half the battle.  An example are my friends summer riding camps.  Those sold really well, I have a few left, fantastic returns.  Problem is I could have realized the same return a year ago, as the value has not budged.  Too much competition from larger Lego friends sets.  Being lazy cost me the time and the space.

[redcell]

20 hours ago, waddamon said:

Llc is a state entity and for various reasons makes lots of sense.  For federal purposes it is a disregarded entity so you must then elect what way in which it will be taxed.  Sole prop, partnership, s corp or c corp.  All are options for federal purposes.

Unless you're trying to get the liability protection of an LLC or set up a structure that would make it easier for others to invest in your business, the only reason to convert is to take advantage of the differential federal tax treatment you can get under one of the corporate forms without having to pay taxes in the same way that the chosen type of corporation pays taxes.

[redcell]

3 hours ago, conceptmachine said:

I have my share of chima  but I'm sitting on them for a decade min.

Not to put too fine a point on it, but this is a really really terrible idea...one of the worst strategies that I've seen on this board.  The reason is this...the sets that appreciate well over a 10-year plus horizon are ones that are either (a) popular during their lifetime and likely to remain so well into the future, or (b) unpopular during their lifetime, but have elements that might turn the tide in their favor at some point in the future.  Maybe lightning will strike with Chima and they will be viewed as the ultimate diamond in the rough in the scheme of Lego sets released during the 2010s, causing their value to skyrocket to heights that seem well beyond even the most ridiculously optimistic projection today, but I wouldn't bet on that happening.  Chima hasn't been a runaway success during its lifetime and I have heard no one talking about how overlooked or misunderstood Chima is.  So, the likelihood is that you will be sitting on however large of a pile of Chima sets that you currently have for the next 10+ years and then selling them for a price that will not justify having that capital tied up in them for that long...and that is assuming that you can even find an interested buyer at that time who is willing to pay a price greater than 2x MSRP.  The ideal time to sell Chima is going to be over the next 12-24 months.  After that, Chima is going to begin haunting ever darker corners of the dust bin of Lego history.  Maybe there's a hardcore Chima contingent out there who will prop them up.  Of course, this all assumes that you were serious in the first place about holding Chima for 10+ years.

[waddamon]

30 minutes ago, redcell said:

Unless you're trying to get the liability protection of an LLC or set up a structure that would make it easier for others to invest in your business, the only reason to convert is to take advantage of the differential federal tax treatment you can get under one of the corporate forms without having to pay taxes in the same way that the chosen type of corporation pays taxes.

You misunderstood.  The LLC is unique in its liability protection and membership vs. Shareholder treatment.  In the context of an llc you still have your choice of tax election and filing.  Those dont have a bearing on the LLC itself.  As an example my firm is an single member LLC taxed as a sub chaptet s corp.

[lego_fan]

33 minutes ago, redcell said:

Not to put too fine a point on it, but this is a really really terrible idea...one of the worst strategies that I've seen on this board.  The reason is this...the sets that appreciate well over a 10-year plus horizon are ones that are either (a) popular during their lifetime and likely to remain so well into the future, or (b) unpopular during their lifetime, but have elements that might turn the tide in their favor at some point in the future.  Maybe lightning will strike with Chima and they will be viewed as the ultimate diamond in the rough in the scheme of Lego sets released during the 2010s, causing their value to skyrocket to heights that seem well beyond even the most ridiculously optimistic projection today, but I wouldn't bet on that happening.  Chima hasn't been a runaway success during its lifetime and I have heard no one talking about how overlooked or misunderstood Chima is.  So, the likelihood is that you will be sitting on however large of a pile of Chima sets that you currently have for the next 10+ years and then selling them for a price that will not justify having that capital tied up in them for that long...and that is assuming that you can even find an interested buyer at that time who is willing to pay a price greater than 2x MSRP.  The ideal time to sell Chima is going to be over the next 12-24 months.  After that, Chima is going to begin haunting ever darker corners of the dust bin of Lego history.  Maybe there's a hardcore Chima contingent out there who will prop them up.  Of course, this all assumes that you were serious in the first place about holding Chima for 10+ years.

I don't have any Chima or Ninjago, and I don't understand their appeal. However, every single kid or teenager I know who has a lego collection DOES have a fair percentage of it based on these two lines, probably more than they have technic. I've spent the last few years collecting all the expensive sets I could never dream of owning when i was playing with Lego - I think the most expensive one that ever showed up in my house was a Fire Station, or Police Station. So maybe the expensive Chima and Ninjago sets will be purchased 20 years from now by todays' teenagers when their purchasing power increases? 

Edited January 11, 2016 by lego_fan
grammar

[Lordoflego]

4 hours ago, conceptmachine said:

I have my share of chima  but I'm sitting on them for a decade min.

What's a fair share of Chima, how many/much? At what discount purchased? 10 years? I think u may b in trouble with this theme

[conceptmachine]

1 hour ago, redcell said:

Not to put too fine a point on it, but this is a really really terrible idea...one of the worst strategies that I've seen on this board.  The reason is this...the sets that appreciate well over a 10-year plus horizon are ones that are either (a) popular during their lifetime and likely to remain so well into the future, or (b) unpopular during their lifetime, but have elements that might turn the tide in their favor at some point in the future.  Maybe lightning will strike with Chima and they will be viewed as the ultimate diamond in the rough in the scheme of Lego sets released during the 2010s, causing their value to skyrocket to heights that seem well beyond even the most ridiculously optimistic projection today, but I wouldn't bet on that happening.  Chima hasn't been a runaway success during its lifetime and I have heard no one talking about how overlooked or misunderstood Chima is.  So, the likelihood is that you will be sitting on however large of a pile of Chima sets that you currently have for the next 10+ years and then selling them for a price that will not justify having that capital tied up in them for that long...and that is assuming that you can even find an interested buyer at that time who is willing to pay a price greater than 2x MSRP.  The ideal time to sell Chima is going to be over the next 12-24 months.  After that, Chima is going to begin haunting ever darker corners of the dust bin of Lego history.  Maybe there's a hardcore Chima contingent out there who will prop them up.  Of course, this all assumes that you were serious in the first place about holding Chima for 10+ years.

Im not in deep in chima and ANYTHING lego.  My folio is around 150k since 2010.  I do it as a hobby with my kids and maybe one day after I retire in 10 years I'll use one of my shops to sell some. I can certainly understand why you would think that it will be a looser in 10-15. What other theme ran for 4 years has had 10 to 15 years to accrue and take statistics from?  IMO, it won't be as big of a looser as you think but I'm not saying it's gonna go bananas either.  It may be worth it to YOU to unload but it isn't to ME.   I don't make living off lego and if I did, I wouldn't have bought any chima.  

Edited January 11, 2016 by conceptmachine