Should i start selling Lego via Ebay?

[Orodes]

Based on what i earn every month and what then comes out of that for my rent, should i give the Lego eBay business a go? On average i earn roughly

[littlenicky]

Anyone can start anywhere. Just make sure you have all the calculations down and start small. See if you can turn a profit and move from there. If you find yourself successful, keep studying the sets and keep trying to figure out how to get it the cheapest possible. If all else fails, hopefully, you break even and learned a little bit about business.

[Orodes]

Which sets would personally recommend? im thinking maybe a few of the ninjago spinners, such as Lloyd ZX, Samurai X and the Weapon Pack with NRG Kai and Chokun, maybe some poly bags if i can get my hands on them for a decent price, things around that area?

[littlenicky]

If you can get Lloyd at regular price or cheaper, definitely go for him.

[comicblast]

Which sets would personally recommend? im thinking maybe a few of the ninjago spinners, such as Lloyd ZX, Samurai X and the Weapon Pack with NRG Kai and Chokun, maybe some poly bags if i can get my hands on them for a decent price, things around that area?

Don't invest all you monies into Ninjago. Not that it will fade or drop in price, but just because there are some other high performing themes and sets out there. Though they definitely cost way more (SW UCS), in many ways they are much better. Instead of storing and selling (eventually) 40 $10 sets, buy 1 $400 set and sell one time and save some time and effort.

Diversify. Though I agree that Ninjago is generally a well performing theme, should it tank, you would not lose all the money invested into it.

Majority of my collection is SW sets, because I really enjoy SW. I also have invested in Hero Factory and Lego City. Since my collection is fairly modest, I do not have a large number of other themes. Other collectors invest in other sets like Chima, CUUSOO's or Architecture.

But, if you can get a decent price on any Legos, generally buy them, then ask around later to see if it was a good deal. If you live anywhere near some of us, it will be gone before you can come back for it!

:)

[Orodes]

Although buying 1 large set and then reselling it is of course alot easier than selling 10 smaller sets, i think with the current amount of money i have to start out with, it would maybe be best to start out small and then hopefully start to increase. i will of course be doing alot of research into what themes and sets i feel are best suited to get me started but as you said comicblast, i will need to look at pretty much every theme instead of just staying with 1 or 2. P.S - I am from the UK

[Legomn]

I've sold on Ebay for awhile now. They suck. The fees are super high, the buyers are ridiculous. I have a few items on the store now and I have just had three items not sell. I have another business and if the margins were anything like eBay, I would be in the gutter. I'm currently looking for new places to sell legos and just opened a store on brinklink.com. I have no idea how the buying and selling is, but it is definitely worth a look.

At least for me in the US, I will give you a quick breakdown of what you always need to take into consideration. You can adjust things accordingly. (I am always learning too!! Never get too arrogant to not try new ways of doing things or taking advice from others into consideration and never become lazy and stop learning. Not just with Legos, but anything else you do as well!)

Fees to always consider:

1. Lego purchase price. I am quickly learning to not ever pay full MSRP, or you have to wait a few years for a decent return.

2. Taxes paid on the purchase price.

3. Listing fees on eBay. For me it comes out to about $2.40 usually, mainly due to a reserve price in place.

4. eBay seller fees. 9% of the price it sells for.

5. Paypal Fees. Most people do not have their own merchant account and use PayPal. They charge 2.9% of the selling price and $0.30. You have to read the fine print about a rolling balance and when you get paid as well.

6. Shipping. This one is huge and can make or break you. I would highly recommend researching everything you can and become a shipping expert. I still need to learn how to ship internationally as I feel some sets (10000 series and others) that are not sold overseas can command a nice return. For me, anything over about 18" in length needs special packaging that you need to pay for. For most smaller size items you can get free boxes from UPS, FedEx and the USPS. You can order bulk shipping boxes from many shipping supply companies for a decent price. I just got some 24X20X6" heavy duty corrugated boxes from Uline for about $3.00 a piece all in with taxes and shipping. Also, don't forget to purchase insurance and get delivery confirmation with every order.

After getting a bottom line, check out the competition like the article below discusses and set acceptable margins for yourself. eBay is structured towards high volume sellers with low margins because that is how they make the most money. If you are not at this level, you need to find deeply discounted sets, find rare sets, find other places to sell then eBay and/or find another niche you can utilize to stand out. To be honest, I am quickly becoming disgusted with eBay. I think researching the specific set you want to sell first and seeing if it is selling at the margins you want is a good approach.

Here is an actual set breakdown for you to see cost (take note that this is not taking into account my gas or my time either):

Lego Set Brand New: (Estimated selling price of this set is $160.00)

1. Purchase Price- $69.98

2. Sales Tax- $5.09

3. Ebay Listing Fees- $2.40

4. PayPal Fees- (2.90% and $0.30) $4.94

5. eBay Seller Fees- (9%) $14.40

6. Shipping- (with insurance, box cost and delivery conformation) $17.25

Total Costs are $114.06

Selling at $160.00

Net Profit: $45.94

Profit Margin: ($45.94/$69.98)= 66% profit. (This is a very high example and I would do this 16 hours a day if all margins were like this!) This also does NOT take into account your time and gas.

Just remember, you always need to track your bottom line. Otherwise you could be losing money and not know it. It's very easy with legos to get emotional and not care because they are so cool! I still want to just rip open all of them and build them!

There's some good stuff to read here as well:

http://reviews.ebay.com/Complete-beginners-guide-to-selling-amp-shipping-on-eBay?ugid=10000000003814256

[Jackson]

3. Listing fees on eBay. For me it comes out to about $2.40 usually, mainly due to a reserve price in place.

What percentage of your auctions don't meet the reserve? Do you start your auctions at 1 penny or something like that?

[Legomn]

What percentage of your auctions don't meet the reserve? Do you start your auctions at 1 penny or something like that?

A decent amount. Maybe about 30%, but that is probably more on me not doing correct due diligence on what is selling and for how much. I never start that low. The starting price always depends on what else is going on and if I am offering free shipping on the item.

[Jeff Mack]

Here is an actual set breakdown for you to see cost (take note that this is not taking into account my gas or my time either):

Lego Set Brand New: (Estimated selling price of this set is $160.00)

1. Purchase Price- $69.98

2. Sales Tax- $5.09

3. Ebay Listing Fees- $2.40

4. PayPal Fees- (2.90% and $0.30) $4.94

5. eBay Seller Fees- (9%) $14.40

6. Shipping- (with insurance, box cost and delivery conformation) $17.25

Total Costs are $114.06

Selling at $160.00

Net Profit: $45.94

Profit Margin: ($45.94/$69.98)= 66% profit. (This is a very high example and I would do this 16 hours a day if all margins were like this!) This also does NOT take into account your time and gas.

Great breakdown. Its a very good example that many people really don't understand when looking to do this.

[joelfinch]

Profit Margin: ($45.94/$69.98)= 66% profit.

I thought profit was based on the total cost of the item to you, not just the purchase price?

Cost of goods sold: 114 (the total to bring it to sale)

Sale price: 160

Profit: 46

Percentage profit: 46/114 = 40%

Still impressively large

I'm happy to be schooled if I'm doing the numbers wrong.

[Veegs]

I'd recommend trying to apply a varied approach. I just sold a nice set via kijiji.ca (which is like craigslist) which means no taxes, shipping, fees, etc. but I only expect to sell 1/10 of my inventory via a method like this. Still, for the one out of ten, it is worth a little of my time to make listings and respond to email. I'd also set up a storefront on a dedicated Lego-selling site (although if you hold out I think this site has some options coming out that might be useful) to sell sets, especially during the slow periods of the year. As others have said, ebay has its uses, but seller beware! A lack of knowledge can result in a lack of profit.

[Legomn]

I thought profit was based on the total cost of the item to you, not just the purchase price?

Cost of goods sold: 114 (the total to bring it to sale)

Sale price: 160

Profit: 46

Percentage profit: 46/114 = 40%

Still impressively large

I'm happy to be schooled if I'm doing the numbers wrong.

You are 100% correct. I was in a hurry to get out the door and did the wrong calculation by mistake. Good catch!

I also will try and look at what percentage a set will sell for on eBay over the MSRP of the set as a comparison to how I am doing. I don't know a seller's costs or how much they got the set for, but I can see what it sold for in comparison to the MSRP. This way I can see how I am doing in comparison and tweak things if needed.

I use the equation that I gave earlier to actually track how well a lego set is doing in comparison to other lego sets. The shipping costs and fees to sell increase as the set gets larger and heavier, but this percentage is a good way to take that out of the equation and actually just compare profit to the set price I paid in a percentage.

I also am trying out a new strategy, which would be to buy enough sets to profit enough to pay for all the sets, keep a set to collect and keep a set to build. In this scenario, if I bought six sets, sold 4 and had the same return (4 X $45.94 = $183.76. I could actually keep two sets and still pocket $43.80 (before taxes)!

The same kind of idea as riding free shares when trading.

[Rich B]

Great breakdown. Its a very good example that many people really don't understand when looking to do this.

I agree, this is a great breakdown. I would encourage anyone who is new to LEGO investing or selling to read this. These are exactly the type of fees you will be dealing with when selling on ebay.

[Pirate]

I'm not going to give an economics lesson here, but profit margin is not profit and is not profit percent. Profit percent is indeed simply: (Profit / Cost) * 100 Cost has nothing to do with expenses incurred in selling your product. It is simply what you paid to buy or manufacture your product.

[Legomn]

I'm not going to give an economics lesson here, but profit margin is not profit and is not profit percent. Profit percent is indeed simply:

(Profit / Cost) * 100

Cost has nothing to do with expenses incurred in selling your product. It is simply what you paid to buy or manufacture your product.

So ($160.00/$69.98)*100= % Profit is 227%....technically. Thanks for not giving an economics lesson. Do I need to indeed simply pay a toll for the trolling?

Troll Toll

[Pirate]

So ($160.00/$69.98)*100= % Profit is 227%....technically. Thanks for not giving an economics lesson. Do I need to indeed simply pay a toll for the trolling?

Troll Toll

If your profit in this case was $160 and cost was $69.98, your profit would indeed be 227%. Nothing technical about it. If you're going by the previous example, though, profit wasn't $160, that was revenue, so I don't know what you're doing with your numbers.

And you also forgot to add the sales tax to your cost.

[Orodes]

I know shipping is a huge factor when it comes to selling goods online, how do people here do it to make it as cheap as possible, coming from the UK i know a big amount of the members here are from the US so specific information about actually 1st class, 2 class etc etc may not be the same at all, but i ask mostly about what you package the items in. Would it always have to be boxes or are bubble lined envelopes and poly bags just as good?

[emes]

1. Lego purchase price. I am quickly learning to not ever pay full MSRP, or you have to wait a few years for a decent return.

2. Taxes paid on the purchase price.

3. Listing fees on eBay. For me it comes out to about $2.40 usually, mainly due to a reserve price in place.

4. eBay seller fees. 9% of the price it sells for.

5. Paypal Fees. Most people do not have their own merchant account and use PayPal. They charge 2.9% of the selling price and $0.30. You have to read the fine print about a rolling balance and when you get paid as well.

6. Shipping. This one is huge and can make or break you. I would highly recommend researching everything you can and become a shipping expert. I still need to learn how to ship internationally as I feel some sets (10000 series and others) that are not sold overseas can command a nice return. For me, anything over about 18" in length needs special packaging that you need to pay for. For most smaller size items you can get free boxes from UPS, FedEx and the USPS. You can order bulk shipping boxes from many shipping supply companies for a decent price. I just got some 24X20X6" heavy duty corrugated boxes from Uline for about $3.00 a piece all in with taxes and shipping. Also, don't forget to purchase insurance and get delivery confirmation with every order.

Just some friendly eBay advice:

1 - Get rid of the reserve price. You're paying a minimum of $2 that you don't need to. Start your auction at a minimum bid of what you need to cover all costs plus the profit you want to make. eBay lets you list 50 auctions per month for no charge regardless of minimum bid. Take advantage of that.

2 - Get yourself up to top rated seller as quickly as possible. This will give you a 20% reduction in final value fees under certain circumstances. One way to do this is by finding many small things and selling them for minimal profit. Polybags are great for this. It's actually fairly easy to get $1000 in sales and 100 items through a combination of big and small items.

3 - For US shipping I build it into my price, for international I use calculated. The only USPS option that will track to the recipient's address is Express Mail International. I've found that international buyers understand that it's expensive to ship and are willing to pay the price. You can also give a small discount for international based on the US shipping that you built into your price. International shipping is actually fairly easy...

MS

[redeemed763]

My personal method is just to charge the buyer the full cost of shipping and packing materials, most people are smart enough to add the two up and I want closer people to me to pay less if it costs me less and people across the world to pay more because it costs more. I don't see the point of "Free Shipping" auctions as I have found that if the seller is willing to absorb the cost of shipping, they already have enough profit margins to work with. Shipping can be expensive though, and it is tough when you don't have the bargaining power that Amazon and Walmart do. I ordered two tower bridges from Walmart and paid 97 cents each in shipping and they arrived in separate boxes that hold 4 of them each. If I were to ship that box, it would've cost me $70 but I highly doubt they paid that much.

[emes]

My personal method is just to charge the buyer the full cost of shipping and packing materials, most people are smart enough to add the two up and I want closer people to me to pay less if it costs me less and people across the world to pay more because it costs more. I don't see the point of "Free Shipping" auctions as I have found that if the seller is willing to absorb the cost of shipping, they already have enough profit margins to work with.

Shipping can be expensive though, and it is tough when you don't have the bargaining power that Amazon and Walmart do. I ordered two tower bridges from Walmart and paid 97 cents each in shipping and they arrived in separate boxes that hold 4 of them each. If I were to ship that box, it would've cost me $70 but I highly doubt they paid that much.

Actually the point of free shipping is in favor of the seller. If you wrap it into the cost of the auction then you can't be rated below 5 on DSRs for "How Reasonable Were the Shipping Charges?".

Regardless of how reasonable your calculated shipping charges are, people are often not happy with them. I realize bundling in the shipping is a trick, but it works....

[redeemed763]

3 - For US shipping I build it into my price, for international I use calculated. The only USPS option that will track to the recipient's address is Express Mail International. I've found that international buyers understand that it's expensive to ship and are willing to pay the price. You can also give a small discount for international based on the US shipping that you built into your price. International shipping is actually fairly easy...

MS

I just used usps to ship a polybag last week and they tracked it to the recipients address and it wasn't express mail international, is there something I am missing?

[CNH1974]

Based on what i earn every month and what then comes out of that for my rent, should i give the Lego eBay business a go? On average i earn roughly

[emes]

I just used usps to ship a polybag last week and they tracked it to the recipients address and it wasn't express mail international, is there something I am missing?

I don't know, but I've been told by USPS that only Express Mail International tracks to the recipient's address. Priority Mail tracks to customs.

Which USPS service did you use?

[redeemed763]

I used priority mail, I was told the same thing at the post office but when I printer the label on ebay, it worked, perhaps it was a fluke, I don't know.