What do you consider a flop?

[spener90]

I feel a lot of people throw around the word flop, yet it can be a very subjective term. What do you consider a flop? Is anything above MSRP great? I left out anything above 100%, because in reality, those can't be considered flops. The goal here is to come to a more sound understanding of what a flop is? Obviously clearances can make even the worst set profitable, but for the sake of discussion, imagine they are irrelevant.

[emes]

I mean this professionally, but this really isn't a very good poll. It doesn't take into account purchasing something below MSRP. In other words, if bought a set for 50% below MSRP, and managed to turn a profit on it, I might have still sold it for less than the original MSRP...So, something that's a "loser" based on MSRP could still produce a positive ROI.

[Alcarin]

I mean this professionally, but this really isn't a very good poll. It doesn't take into account purchasing something below MSRP.

In other words, if bought a set for 50% below MSRP, and managed to turn a profit on it, I might have still sold it for less than the original MSRP...So, something that's a "loser" based on MSRP could still produce a positive ROI.

technically you are right about that, but a set that does not grow ATLEAST 25% compared to MSRP 2 years after EOL is considered a flop to me and should be so overall.

If you bought something for 50% of MSRP thats fine but ultimately line/set is still FLOP if it does not grow in value above MSRP.

Its not a flop for you but overall the set is still a flop even if you sell it for profit.

I would personally say whatever set does NOT grow MINIMUM of 25% of MSRP within 2 years of EOL is in my book a flop more or less.

Now for us Europeans sets usually need to grow ATLEAST 50% of MSRP to be comparable to US and not be considered a flop OVERALL.

Think you are trying to look like a flop is subjective matter. While it can be but for a subjective opinion profit is the key not growth...

If you obtain something as you claimed 50% below MSRP its already not a flop because you can sell it on MSRP and get profit. But for determination of a set flopping or succeeding we need to stick to MSRP rule and percantage increased in a valid period

I would assume a set flopping, succeeding determines by:

How much set increases within 2 years of EOL date.

Thats a reasonable time period and if sets CAGR within 2 years of EOL can reach as high as 20%+ (which means 20% annual growth for those still unfamiliar about CAGR) that means set is successful

[JoshTX]

A profitable set can still be a bust, in my opinion, if the money I spent on it could have been better invested in something else with a bigger return rate. I guess what I am trying to say is this: Let's say you go to a bank and throw 400 bucks into a CD with a 2 year hold at a 2% interest rate per year (yes, interest rates on CD's are that bad or worse). After 2 years of that money being held, you end up with an interest rate profit of $16.00 ( 400X.02X2). Now let's say you bought a Death Star for 400 bucks, held it for two years, and tried to sell it...can you make at least more than $416.00 on it? If so, then you made a better investment than most CD rates can offer...that doesn't mean it isn't a flop based upon your own expectations for it, but it is doing better than one of the most conventional methods of savings in America. Now if you can't sell the Deathstar for that much after holding two years...it could be a flop if the goal was to sell in two years. However, the set could be underwater after two years (I know it is for many on here) but then again it could, and is very likely to, see a gain of much more than 2% after a number of years (we don't know?) when it goes EOL. I guess whether or not something is a flop is largely based upon time held, expectation of gain, etc. I know that didn't exactly answer your question but it does show some perspective.

[emes]

Way off topic, but what does the "Manage Ignore List" feature do in the profile settings if it doesn't prevent me from seeing posts from people on that list? Obviously I find JoshTX's posts infuriating....

[JoshTX]

Way off topic, but what does the "Manage Ignore List" feature do in the profile settings if it doesn't prevent me from seeing posts from people on that list?

Obviously I find JoshTX's posts infuriating....

Huh? ;-)

[emes]

Huh? ;-)

LOL...I see my lame attempt at humor didn't work. Or wait...what does that smiley face mean???

We need a thread about smiley faces...

[Diabolos80]

LOL...I see my lame attempt at humor didn't work. Or wait...what does that smiley face mean???

We need a thread about smiley faces...

lol. http://www.brickpicker.com/index.php/forums/viewthread/3554/

[spener90]

I mean this professionally, but this really isn't a very good poll. It doesn't take into account purchasing something below MSRP.

In other words, if bought a set for 50% below MSRP, and managed to turn a profit on it, I might have still sold it for less than the original MSRP...So, something that's a "loser" based on MSRP could still produce a positive ROI.

The intention of the poll is to have a better understanding as to what everyone feels a flop is. The best was to do that is to compare it to MSRP. If you read my original post I clearly say that clearances/sales are meant to be irrelevant. Obviously if you bought something for anywhere between 50-75% off, it would be difficult to not turn a profit. MSRP is there for a reason, it is meant to be the base for a sets value. I understand everyone pays different amounts per set, so This is an attempt to find a more consistent meaning of "flop."

[nolanfan34]

I voted 0-25%. I think something that has gone EOL and hasn't grown more than this in 2 years is a flop in my book. Of course you could include stuff below MSRP (Mon Calimari) in that as well. The challenge with the poll is that it requires another axis of time - what is a flop to me, might not be a flop to someone else if we have different investment strategies.

[emes]

The intention of the poll is to have a better understanding as to what everyone feels a flop is. The best was to do that is to compare it to MSRP. If you read my original post I clearly say that clearances/sales are meant to be irrelevant. Obviously if you bought something for anywhere between 50-75% off, it would be difficult to not turn a profit. MSRP is there for a reason, it is meant to be the base for a sets value. I understand everyone pays different amounts per set, so This is an attempt to find a more consistent meaning of "flop."

I somehow missed that last sentence in your post about clearances...guess I was looking at the poll. Apologies for that.

I still don't think it's a great poll...even something that you make as little as a 5% profit on, if you do it enough, that's success. Casinos often have a 1% or less edge on some bets, and in the long-run you'll succeed with the tiniest of edges if you can repeat the transaction enough times. I do understand that this is not the point of your thread/poll though, it's just that I think there's a general sense that "flop" equals "unprofitable", when it really doesn't.

[redeemed763]

I just bought a Helm's Deep at Target for $92, which is a pretty decent discount, (about 35% after tax) now for a $130 set, lets say it grows 25% over the next couple years, this would make it sell for $162.50. If i sell it on ebay, I would pay ebay and paypal $25 for the transaction and another $20 in shipping and handling, this would bring my net profit to $25. I know I am not loosing money but for the effort of ordering, storing, listing and shipping the order, that is just not worth it, I need a bigger return. If it was selling for 50% above msrp in two years, that would yield a sale amount of $195, in that case, my fees would come to about $30 and shipping would still be $20; however, my total profit would come to $53. Making $53 off that transaction is where I would consider starting to be profitable. If it were selling for $260, or 100% above msrp, I would make about $110 off the transaction. This is why controlling your entry point is so crucial. The folks on here buying sets for 50% or more off msrp are the ones making money, the rest of us are going to be scraping peanuts off the floor.

[spener90]

The intention of the poll is to have a better understanding as to what everyone feels a flop is. The best was to do that is to compare it to MSRP. If you read my original post I clearly say that clearances/sales are meant to be irrelevant. Obviously if you bought something for anywhere between 50-75% off, it would be difficult to not turn a profit. MSRP is there for a reason, it is meant to be the base for a sets value. I understand everyone pays different amounts per set, so This is an attempt to find a more consistent meaning of "flop."

I somehow missed that last sentence in your post about clearances...guess I was looking at the poll. Apologies for that.

I still don't think it's a great poll...even something that you make as little as a 5% profit on, if you do it enough, that's success. Casinos often have a 1% or less edge on some bets, and in the long-run you'll succeed with the tiniest of edges if you can repeat the transaction enough times. I do understand that this is not the point of your thread/poll though, it's just that I think there's a general sense that "flop" equals "unprofitable", when it really doesn't.

So I'm guessing you consider 0-25% a success? ;-)

I just see so many expectations of massive returns by some that I was curious as to what people thought was a poor performing set.

[Anakinisvader]

In other words, if bought a set for 50% below MSRP, and managed to turn a profit on it, I might have still sold it for less than the original MSRP...So, something that's a "loser" based on MSRP could still produce a positive ROI.

I have to agree with this here. I buy most of my sets at huge discounts (50-70% you just have to be patient) and sell for around MSPR (sometimes greater) and can easily make 50% to 100% profit. I never pay retail and usually won't bite on an item unless it is discounted 30% or more. Maybe this poll isn't for me since I won't sit on most items that long.

A flop for me is something I can't get over 50% profit on after fee's and shipping.

[emes]

So I'm guessing you consider 0-25% a success? ;-)

I just see so many expectations of massive returns by some that I was curious as to what people thought was a poor performing set.

It depends on the situation. There are people who buy US Treasuries for 0% or less return right now. People mistakenly take that to mean that the currency is worthless, but it actually means exactly the opposite. People are willing to invest in dollars for a 0% return simply because they know that in whatever time period the investment was that they will still have the same amount of money as when they started. So yeah, if I were simply trying to preserve capital over some period of time, a 0% return might be successful...

It goes back to what JoshTX is saying about how it all depends on what your goals are when you invest.

As far as picking and selling, mine and my wife's rule is a minimum 30% profit (after all fees and shipping) over the price we paid. Sometimes the price we pay is heavily discounted and other times it's MSRP...it depends on what it is, but there are some items out there that are worth buying that are never sold below MSRP. I couldn't care less how much something or whether or not it appreciates in a general sense...instead, I care about finding a buyer at my chosen price.

With all of this in mind, I don't own any PoTC, Toy Story, or Cars sets. The risk seems to outweigh the reward in these cases.

I agree with you though about the outlandish returns that people seem to expect. Not only do we see that, I think most people miss that this is really a rinse and repeat volume business if you want to make serious money doing it.

[Alcarin]

A profitable set can still be a bust, in my opinion, if the money I spent on it could have been better invested in something else with a bigger return rate. I guess what I am trying to say is this:

Let's say you go to a bank and throw 400 bucks into a CD with a 2 year hold at a 2% interest rate per year (yes, interest rates on CD's are that bad or worse). After 2 years of that money being held, you end up with an interest rate profit of $16.00 ( 400X.02X2).

Now let's say you bought a Death Star for 400 bucks, held it for two years, and tried to sell it...can you make at least more than $416.00 on it? If so, then you made a better investment than most CD rates can offer...that doesn't mean it isn't a flop based upon your own expectations for it, but it is doing better than one of the most conventional methods of savings in America. Now if you can't sell the Deathstar for that much after holding two years...it could be a flop if the goal was to sell in two years. However, the set could be underwater after two years (I know it is for many on here) but then again it could, and is very likely to, see a gain of much more than 2% after a number of years (we don't know?) when it goes EOL.

I guess whether or not something is a flop is largely based upon time held, expectation of gain, etc. I know that didn't exactly answer your question but it does show some perspective.

So in your opinion other words would be.

Apart from NUMBER 1 investment in terms of returns EVERYTHING ELSE is a bust/flop ?

Because ALWAYS something (investment) is better than 99.999999%

And even if we go and limit your (in my opinion weird if not worse statement) words to LEGO only that makes only 1 set at a time as best investment making everything else a flop.

I am sure you would agree thats a pretty weird and illogical way to calculate a flop investment.

[Alcarin]

I have to agree with this here. I buy most of my sets at huge discounts (50-70% you just have to be patient) and sell for around MSPR (sometimes greater) and can easily make 50% to 100% profit. I never pay retail and usually won't bite on an item unless it is discounted 30% or more. Maybe this poll isn't for me since I won't sit on most items that long.

A flop for me is something I can't get over 50% profit on after fee's and shipping.

Yeah but if you made the profit that does make it success for you the line overall is still a flop if their CAGR is below XX%

We/you are all confusing personal flop and overall flop. (or success)

If you bought Prince Of Persia set for 90% off (theoretical example) its still a success for you in terms of NET gain but the set would still be a flop overall (as was the whole theme)

you're comparing apples and oranges here guys...

[JoshTX]

So in your opinion other words would be.

Apart from NUMBER 1 investment in terms of returns EVERYTHING ELSE is a bust/flop ?

Because ALWAYS something (investment) is better than 99.999999%

And even if we go and limit your (in my opinion weird if not worse statement) words to LEGO only that makes only 1 set at a time as best investment making everything else a flop.

I am sure you would agree thats a pretty weird and illogical way to calculate a flop investment.

I'm having a really hard time understanding what you are getting at here. The hypothetical example I provided was just ONE method of determining whether something could be considered a flop or a good investment. I used a Lego set as a reference only because it provided a an example relative to what people on this forum are investing in, but the theory could be applied to anything. I did not define "flop", I simply provided a basis of investing to compare whether investing in a Death Star could be considered a "flop" in terms of profitability versus a conventional investing method such as a CD.

If I'm reading what you wrote correctly, you seem to be implying that I think investing in only 1 set at a time is a "best investment"? Please clarify.

What I tried to do was provide a simple formula for Cost X Interest X Time.... Aren't you a genius? I figured you would see where I was coming from. In storing money we can sometimes know our interest rates because they can be locked in...like a CD or savings bond. In Lego and many other markets, we usually can only predict them.

Let's say you paid 100 bucks for a Helms Deep (Cost) X You don't know the interest until you sell (Interest) X You held the set for 5 years. I'm not going to get into a math formula on here about it, but it's a matter of finding the rate of your interest by dividing your interest (cash) gained over principal spent and time stored in your closet or wherever.

What I provided was a simple method of determining any set's potential ROI versus a traditional method of investing. If some people earned less on storing a set in a closet for years over what they could have made in a CD or bond account, they "MAY" consider their investment a flop. Please tell me, in your infinite wisdom, how this example is illogical.

[Grolim]

My thinking is along the same lines as JoshTX and emes on this. To me a "flop" is anything that appreciates less than the Risk Free Rate of Return (RFRR). But it depends on your definition of the word "flop". Some people see a "flop" as below breakeven, some (myself included) below the RFRR, others if it doesn't make 10% profit, and I'm sure some need to see even more in order to not label it a "flop" in their terminology. Also I don't like to categorise things that way. If you start trying to pigeon hole a bunch of things into a category, you need other categories. What's the line between "flop" and "poor investment", or "ok investment", or "good investment", or "shocking investment". It's pretty arbitrary and meaningless. Just let the numbers do the talking.

[Ed Mack]

I mean this professionally, but this really isn't a very good poll. It doesn't take into account purchasing something below MSRP.

In other words, if bought a set for 50% below MSRP, and managed to turn a profit on it, I might have still sold it for less than the original MSRP...So, something that's a "loser" based on MSRP could still produce a positive ROI.

Yes. Good point. My Atlantis, Prince of Persia and Pharaoh's Quest sets fall into that category. All sets were purchased well below MSRP and all have increased from my buy in point. This is one idea which will be addressed with the next Brickfolio upgrade.

[chinothegeeko]

A flop to me is making a net return of less than 10%. I only get angry if I lose money on something. Obviously I try and shoot higher which for the most part I average 31% on items I sell but it's always a nice lesson to see what and where you failed at and especially why. Sometimes buying over msrp on items gets you a nice profit in the end.

[Alcarin]

So in your opinion other words would be.

Apart from NUMBER 1 investment in terms of returns EVERYTHING ELSE is a bust/flop ?

Because ALWAYS something (investment) is better than 99.999999%

And even if we go and limit your (in my opinion weird if not worse statement) words to LEGO only that makes only 1 set at a time as best investment making everything else a flop.

I am sure you would agree thats a pretty weird and illogical way to calculate a flop investment.

I'm having a really hard time understanding what you are getting at here. The hypothetical example I provided was just ONE method of determining whether something could be considered a flop or a good investment. I used a Lego set as a reference only because it provided a an example relative to what people on this forum are investing in, but the theory could be applied to anything. I did not define "flop", I simply provided a basis of investing to compare whether investing in a Death Star could be considered a "flop" in terms of profitability versus a conventional investing method such as a CD.

If I'm reading what you wrote correctly, you seem to be implying that I think investing in only 1 set at a time is a "best investment"? Please clarify.

What I tried to do was provide a simple formula for Cost X Interest X Time.... Aren't you a genius? I figured you would see where I was coming from. In storing money we can sometimes know our interest rates because they can be locked in...like a CD or savings bond. In Lego and many other markets, we usually can only predict them.

Let's say you paid 100 bucks for a Helms Deep (Cost) X You don't know the interest until you sell (Interest) X You held the set for 5 years. I'm not going to get into a math formula on here about it, but it's a matter of finding the rate of your interest by dividing your interest (cash) gained over principal spent and time stored in your closet or wherever.

What I provided was a simple method of determining any set's potential ROI versus a traditional method of investing. If some people earned less on storing a set in a closet for years over what they could have made in a CD or bond account, they "MAY" consider their investment a flop. Please tell me, in your infinite wisdom, how this example is illogical.

I never heard of anyone saying that putting money on bank is investing but ok, if you or somebody else call it that way so be it, but to me putting a money on bank is what Grolim wrote below your post a Risk Free Rate of Return (RFRR) not investing.

What I am trying to explain is the fact that something being a flop OVERALL (compared to other LEGO lines) or even as you say compared to RFRR is not also everyones flop.

If you buy Helm's Deep on 100$ and hold it for 5 years and sell for 400$ thats great in your book (personal flop) BUT it also makes Helm's Deep overall success (compared to many other 100$ sets and OTHER lines (like Ninjago, Chima etc)

So Helm's Deep is personal and general success.

But if you say Buy (for example) Atlantis set on 50% off (and sets retail is 100$ so you got it for 50$) and if you sell it 1 year after EOL for 100$ you can consider it a success in your OWN book but the line is still a flop compared to other LEGO lines/themes.

The thing is Nothing is a flop if you get it cheap enough. But to determine overall performance of theme/line we need to look on overall increase of value compared to their retail.

Your cost interest vs time is great method but in the end we never know when they are at an all time high for any set, we speculate.

You can say buy a set keep it for 3 months and see it lose value so thats worse than putting money on bank for the first 3 months, but then it might pick up heavily and outperform bank savings or even shares.

I personally think on anything I can make 50% of initial input value as NET return I consider success. But that is because I am European and have to invest way differently than majority of Americans who can keep flipping sets easily. majority of EU investors (or most world for the matter of fact) have to only invest long terms and hope for doubling values of sets to make decent returns.

Another example on what I wrote above directly through your example of Death Star. Ok You bought it for 400$ you wait 2 years cannot sell it for more than 416$ you can call it a flop, you wait 5 more years (theory) and sell it for 600$...

So did the set go from flop to success ?

generally that makes Death Star increase 50% in value over 7 years... Not a pretty great CAGR but it increased. Now we must compare it to other big sets from SW to determine if it was generally a flop or not Personally its up to each individual to decide if thats flop or not but overall we can still call sets flops/success (just like we call Toy story/atlantis, PoP flops some might made good money on them.

[JoshTX]

Dude...none of the information you just posted is even disputing anything I stated, so at this point we really aren't even arguing different points. You are basically either agreeing with me or elaborating further on your own opinions related to the matter. I get that you are trying to trying to find a general consensus on whether a set could be considered a flop by comparing it to other sets/themes and retail price versus personal amount paid for something versus how much you actually sell it for. Anakin's and Sebulba's podracers could be considered an investing "flop" because it goes for less than MSRP on EBAY, but if I paid some guy 5 bucks for one and turned around and sold it for 50, it was still a great investment for me, despite being recognized universally as an investment flop. I get it. But that still doesn't prove anything I mentioned previously to be illogical.

[Snowcrash]

I'm going to take a different approach here and say that any set that doesn't perform to expectations in EOL could be considered a flop. Hypothetically speaking, if we're all sitting here this time next year discussing how Vampyre Castles are trading around $125 a piece I think that set could be considered a flop even though nobody who bought one, even at MSRP, would be losing money.

[JoshTX]

I'm going to take a different approach here and say that any set that doesn't perform to expectations in EOL could be considered a flop. Hypothetically speaking, if we're all sitting here this time next year discussing how Vampyre Castles are trading around $125 a piece I think that set could be considered a flop even though nobody who bought one, even at MSRP, would be losing money.

This is generally true of many industries, especially as far as companies that must answer to stockholders. If a product's projected sales are not met, it's manufacturers will often have to answer to its stockholders and take steps to minimize damage, even if the product did not put them in the red...because it still did not meet projections that allowed for an expected rate of financial growth. These companies must "sell" themselves to investors by promising future gains, and then delivering on them.