Bought online, return at shop

[TheOrcKing]

I would guess that's stoltz's collection, not investment portfolio.  Per Ed and Jeff, there are thousands of members just like him that use the Brickfolio to estimate the value of their collection and have no intention of ever reselling a Lego set.

Like me. :derisive:

[MartinP]

I would guess that's stoltz's collection, not investment portfolio.  Per Ed and Jeff, there are thousands of members just like him that use the Brickfolio to estimate the value of their collection and have no intention of ever reselling a Lego set.

That is what I mostly do. I use the brickfolio to see how much my collection is worth. Probably once a month a sell a set close to Brickpicker value, but that set is still in the Brickfolio.

[Quacs]

Of course in the immediate future the prices would skyrocket, but it couldn't be sustainable to the already growing reseller population.

 

My point being though is that although they would be highly sought after, they would slowly but surely disappear as sets are opened, stashed away, etc.

 

What I believe you guys are missing (possibly) is that if Lego closes shop, so would the majority of resellers.  In a sense resellers need to find a symbiotic relationship to continue for decades making money.

 

That was mainly my point, and obviously TLG sees a threat with resellers, and some of the big players need to tread a little more lightly because they could be shooting their golden goose in the head.

 

If Lego closes their doors, ALL resellers would eventually close their doors or find something else to sell.  I agree that would be bad for resellers.

 

My question with your previous posts is that I don't see how a strong reseller market leads to the demise of Lego.  While there are opportunity costs to Lego from not selling their sets at the maximum price/quantity ratio (that the secondary market likely affects), the presence of a strong secondary market and/or "power resellers" doesn't mean Lego will lose money or start down the path to bankruptcy.  The secondary market is a direct reflection of unmet demand for a product.  I can see how a strong secondary market could restrict Lego's profit maximization, but there's a wide gulf between that and losing money.

 

If anything, I believe the secondary market supports the brand's popularity.  As a personal anecdote, I have two friends this year that bought the Winter Village Cottage, and immediately fell in love with the WV sets.  Both started scouring eBay for the rest of the WV sets, and to date, one has purchased the rest of the WV sets, and the other has purchased the Bakery and Post Office.  Without this outlet to purchase the previous sets, I highly doubt either would have become collectors of the theme because of the inability to complete their collections.  Now that they have them, they will be buying WV sets every year from Lego until they stop making them.

[citymorgue]

If Lego closes their doors, ALL resellers would eventually close their doors or find something else to sell.  I agree that would be bad for resellers.

 

My question with your previous posts is that I don't see how a strong reseller market leads to the demise of Lego.  While there are opportunity costs to Lego from not selling their sets at the maximum price/quantity ratio (that the secondary market likely affects), the presence of a strong secondary market and/or "power resellers" doesn't mean Lego will lose money or start down the path to bankruptcy.  The secondary market is a direct reflection of unmet demand for a product.  I can see how a strong secondary market could restrict Lego's profit maximization, but there's a wide gulf between that and losing money.

 

If anything, I believe the secondary market supports the brand's popularity.  As a personal anecdote, I have two friends this year that bought the Winter Village Cottage, and immediately fell in love with the WV sets.  Both started scouring eBay for the rest of the WV sets, and to date, one has purchased the rest of the WV sets, and the other has purchased the Bakery and Post Office.  Without this outlet to purchase the previous sets, I highly doubt either would have become collectors of the theme because of the inability to complete their collections.  Now that they have them, they will be buying WV sets every year from Lego until they stop making them.

 

 

I'm not entirely saying that a secondary market would demise Lego, just that some large resellers are becoming a big target for Lego.  Apparently in my mind, seem to have unduly painted a big target on themselves.

 

The secondary market is awesome as I have been able to purchase a few sets that I have missed out on, and that I don't have a problem with.  As with the statement I read earlier from TLG, is those big guys that go to the stores and online and order such a huge quantity that it does potentially hurt the person wanting to just buy an individual set.

 

Of course there ways around that, and I don't want to stir the pot, but readding the thread on 41999 is a good example of big guys screwing it up and possibly hurting themselves because they got greedy as hell.

 

There are plenty of things that I collect that have a fan bases, but reselling doesn't seem to be quite on this scale (or perceived scale.)

 

I have a particular watch brand that I love (DOXA,) and they produce limited runs of their watches.  I have one particular watch that only 50 were ever produced.  But of course it's not on the same scale size as Lego, but there aren't people out there buying up every single piece of a particular watch to control the market or wiping stores clean to control the market.

 

Now another market that I particularly have beef with is the ball python morph market but I won't go there as that's WAYYY off topic.

 

Anywho...

[Quacs]

I'm not entirely saying that a secondary market would demise Lego, just that some large resellers are becoming a big target for Lego.  Apparently in my mind, seem to have unduly painted a big target on themselves.

 

That's true.  I just don't think resellers could ever corner the Lego market, although 41999 is one exception to the rule.  That said, TLC has been smart about how they've released this set to Lego Stores in batches, slightly alleviating the reseller monopoly on this set.

[stoltzjl77]

I don't "dabble" in Lego - I'm a serious fan. But my investment Brickfolio is only about 10-15% of my total collection. The rest is for me, er, my kids. Yeah, it's for my kids, right.

[kvasir]

That said, TLC has been smart about how they've released this set to Lego Stores in batches, slightly alleviating the reseller monopoly on this set.

There are some 105 LEGO stores around the world. That's 190 sets per store on average not counting LEGO Shop at Home, other retail outlets and a few sets here and there removed from circulation. So no matter how LEGO releases this set in batches -- quick flippers may lose -- long term 41999 investors are sure to win.

[Ed Mack]

I don't know if this has been addressed, but what happens if Lego does do this and undercuts themselves and let's say actually do go out of buisness...  This seems like an obvious answer, but what about the tens of thousands some people have invested?

 

I doubt they would purposely run themselves into the ground like this, but it's not out of the question.

 

Honestly I'm somewhat failing to see how them setting restrictions will backfire.  Outside of the normal reseller, who seriously goes out and buys more than 2 or 3 sets total for any particular set?

 

If they can manage to bring production costs down far enough to still make a healthy profit and undercut themselves to hurt resellers, I don't see that as a bad thing either IMO.

I would have to say that most resellers will have more than 2 or 3 of a set they feel confident in investing in.  Everyone has their favorites.  The current value of member's Brickfolios is around $50 million.  That is probably a drop in the bucket as to the actual number of dollars invested in LEGO sets.  Resellers play an important role in LEGO's profits, whether they want to tell you are not.  They can spin facts all they want and tell you kids buy all the sets.  While most LEGO sets are sold to children, the important question that will be answered in the next year or two is how many are sold to AFOLs and resellers.  Also remember that many resellers have kids.  If the resellers lose interest, will their kids as well?  If any business restricts sales, you are playing with fire in this economy.

 

LEGO might believe it is doing the smart thing by protecting their brand by hurting resellers, but there could be a point where it backfires.  Maybe the lack of sales on these large and exclusive sets will take a huge bite out of their profits if people(non-resellers) decide it is too much to pay.  As a business owner myself, I know that good times are fleeting and bad sales can happen at any time.  Why would LEGO want to devalue their product?  It makes no sense and would only spur investment IMO, at least in the short term.  The old rare sets would still be old and rare sets that are of the same value as before.  Even a remake won't affect a quality old set(Take a look at the UCS 7191 X-Wing for an example of this.).

 

Bottom line is this.  As a reseller, if you bought the correct LEGO set a a fair price, you can make money in any market.  Those who are paying premiums for sets(41999) risk losing money in the short and maybe...long term.

[wesman888]

So does that mean buying the 41999 sets in particular at MSRP will not lose?