It's well known by now, but I started a Lego business a while back in August and have been, like most of you, working to make it the best that it can be. I work in an industry where efficiency is not only the key, but it is expected to grow and thrive with every new iteration of a product or service. Without progress we have nothing, right? Well, I bring this same mindset to my business everyday. Anytime I do something, no matter if I have done it 100 times, I say "how could I have done this better?" and "How could I have spent less time?" or "How could I do this for less?". While I don't want to skimp or do things the wrong way, keeping these questions in mind are the only way to stay afloat in the economic world. Everything is about adaptation: If you aren't ahead, you are behind.

So looking into that, I wanted to write a blog to do a couple of things. First, I want to give you some of my favorite money saving tips, and then encourage people to post in the comments some of the ways they save money when they buy and work for their business. To make this not 100 pages long, I am really looking at buying materials and merchandise, not necessarily efficiency from a time or bookkeeping standpoint. Here we go!

Reuse Packaging from your Prior Lego Purchases

When I see people throw away a good box, it hurts me inside! Boxes are very simple, but some of the most amazing materials you could ever use. Why? It folds up flat!!! I understand sometimes you get a Lego set in and you are so excited to open it, you just toss the box it came in inside the trash can. Believe me, I am seriously lazy too. Instead, cut the seals and flatten that box - you can store it somewhere really easy and re-use it. A lot of people have posted on the forum about where to buy boxes. Unless you are buying in B&M stores or need a special box size, you should never have to buy boxes. I have not bought boxes for a normal Lego set since I started this.

Some people do have storage issues and that is understandable. One smart thing to do is keep all of your investment sets inside storage boxes. It definitely takes up time, but they are ready to ship later on and you can stack them much easier without hurting the set inside at that point.

As far as packing materials, if you can, keep these as well. I keep as much packing material from each set I buy as I can. As a business, things are up and down and any time you run out of packing material and have to go buy it, you are losing money. I normally will put packing material that doesn't take up a lot of space, like brown paper, into big bags and flatten it out as much as possible and save it. For all my normal shipments, I will use the big stuff like shipping bubbles in my normal packages. When a fast period hits and I run out, I have an accessible stash of materials I can pull out so I never have to buy any.

There are a lot of other things that work well as packing material also. When I go to the grocery, I save all my plastic bags. If I open something in the mail with brown paper, or plastic bags around it, I dump it in my packing pile (after removing labels). The people you are sending these sets to don't care what you protect it with - it just needs to get there intact. Get creative with anything that comes to you - if you buy packing material, you are just wasting money!

Buy in bulk

When you first get started with a Lego business, or any business really, its hard to think about the future when you buy supplies. Most of us are on a limited budget and we look at rolls of tape and say "I am sending 3 packages day, why should I buy 100 rolls to save 50 cents a roll"? Everyone has to make their own decisions, but if you trust your business will grow, take the plunge on buying in bulk - especially in the first year.

First off, as you do use them, you will appreciate the money you are saving off those rolls of tape (100 rolls x 50 cents = 50$!). When I first started, I was buying padded envelopes at about 25 cents a piece in 100 counts. After a while, I realized if I bought 1000, I could get them 8 cents each! That makes a big difference to your bottom line, especially if you do that with everything: bubble mailers, tape, paper to print labels, etc.

Another big reason to do this early: taxes. As I saw my business growing and my amount of materials needed growing, I went ahead and took the plunge on a lot of materials early. Since I need this and capital to allow my business to keep growing, I now can worry about my product and not worry about materials for a while and I can write all of this off my taxes my first year, meaning I get to keep more of my earned profits. Next year my tax bill will be bigger, but in theory I will have increased profit enough to counteract it.

Obviously you have to make your own decisions about where you want your business to grow, but don't hesitate to buy something in bulk just because it is a lot of money. I never thought I would spend 80 bucks on bubble mailers, but I am so glad I did.

Buy Supplies on Ebay

I see a lot of people buy supplies on Amazon quite a bit with two day Prime shipping. While i love Amazon, I think Ebay is the best place to get supplies for a couple of reasons. Ebay bucks and auctions.

Ebay bucks is a program Ebay has that gives you 2% back on every ebay purchase you make. They add up until the end of each quarter when Ebay basically gives you a gift card for the amount of money you have in Ebay bucks to spend on the website. Now most people are going to say "I get 3% on my Amazon card!". When you go to pay for your Ebay purchases, assuming you don't have a balance, you can select to pay from one of your credit cards rather than your bank account, reaping the rewards they provide also. Most credit cards provide between 1-2% on everyday purchases so this stacks. If you have a paypal mastercard, paypal gives you 2% cash back meaning you will be earning 4% for those Ebay purchases.

Combined with this, I check out auctions for packing materials constantly. A lot of the vendors on Ebay will put their packing materials on 99 cent auctions (not sure why) with free shipping. If you watch these, you can sometimes score great deals on the big bulk lots. Smaller lots seem to go for the same or more than the Buy It Now prices, but larger bulk auctions usually have less people watching them meaning a better chance you will score. Though it requires a bit more effort, you only have to do it a few times a year if you are buying in big bulk.

A side effect of using Ebay for this stuff:  I am on it more and more. I notice deals while going to watch my packaging materials and end up scoring Lego sets too. Win-win!

Cardpool.com

This is a really awesome website that allows users to sell their giftcards to cardpool for a percentage of the value on the card. Cardpool then sells the giftcards at a preset discount based on the vendor to people like us who want them. My favorite vendor at this site is Toys R Us. You can buy online giftcards for 4% off. If I am about to spend $100 at Toys R Us, I buy a giftcard for $100 at Cardpool for $96 using a credit card that gives me 1% cash back. I then buy the 100$ worth of stuff on TRU's website using the giftcard, and getting 2% in rewards from Toys R Us.

The website does not have Amazon or Ebay, but does have Target (although Redcard makes more sense), Barnes and Noble, and Walmart as well as many other retailers.

This leads me to the last one

Plan your purchases around Credit Card rewards:

I already wrote a blog about making money off of rewards programs from credit cards and membership cards.

Expanding on this, Credit Cards are getting more and more aggressive about giving their customers rewards. I have 13 credit cards (how that affects credit is a discussion for another time - please don't just go get 13 credit cards) which I know by heart what percentage I get where with them. For example, for online Walmart purchases, Discover gives me 5%. Discover and Chase give 1% cash back on everything - Citi is 1.5%, etc. Using this info, as I am about to make a purchase, I immediately know which card to use in every situation.

Most credit cards do quarterly and monthly promotions; Make sure you sign up for these and the emailing lists to be notified about them and take the time to know them inside and out. You can get a serious amount of money back each month (My Amazon card was $125.50 this month!!!).

Use Brickpicker.com Affiliate Links

What's an affiliate link? Well, over in the Daily Deals Forum (you must be a BP member) we post deals all day we find online. These links are embedded with a special tag that tells the online retailers that Brickpicker directed the purchaser to the site to buy something. When you make a purchase through this, the retailer gives Brickpicker a percentage kickback for the referral. This is extremely important to Brickpicker as it is free and this money goes to keep this site running and updated with new features.

How does this save you money?

Without Brickpicker, I and probably 90% of the people on here would be investing in Construct-a-Zurgs and Prince of Persia and wouldn't have made much money at all, found many good Lego deals, or learned as much about Lego as we do everyday here. This is by far the best way we can give back to Brickpicker and save ourselves money in the future by helping Brickpicker be the best it can be so it can continue benefiting us the most possible.

Anyone got any other good money saving tips?

A disclaimer before we start: I have thoroughly enjoyed the previews for The Lego Movie. I giggled at times and was generally pretty excited at the prospect of seeing it in theaters. I've also been checking out the sets from the movie and reading/watching reviews of the builds. Overall, I think they are kinda eccentric and zany, like my uncle Jim after a lot of 'eggnog' at Christmas, dancing to Santa Baby with my wife's scarf. Fun, fun, fun! Sadly, fun alone does not profits make; does fun and popcorn sold translate into worthwhile Lego investments?

Here are my cons:

1) Lack of set cohesion

I'm having trouble envisioning how many of these sets will seamlessly integrate into existing LEGO setups.  For most children, this probably isn't an issue, but for older builders with, say, a cityscape, I don't see a lot of easy integration.  I do understand that these sets are directly related to the movie itself, but I'm unsure how they'll work with any of the other popular themes.

At this point you should point out that the current number one CAGR% theme, Dino, doesn't really merge well with others.  To that I'd have to say that dinosaurs have been popular with kids, since, well, dinosaurs existed *almost*.  These movie sets are a break from anything I've seen TLG make, and since they don't play well with other themes I think they need to stand on their own.  These sets look like Cuusoo sets gone wild - very fun, very original, but I don't think the sum of the parts is greater than the whole.  Without a past history of success for a whole line made in this fashion, I'm leery of tying up my investment capital.  Also, a good chunk of the sets have those micromanagers that look like glorified black boxes - not sure how much long-term appeal they have, or if people are going to want to army build with them...

2) Movie release date/Will people remember TLM by the holidays 2014?

I think the release date is terrible - why wouldn't a move that is essentially a vehicle to sell and promote toys (that sell best during the holidays) be released during the holidays?  I'm concerned that by the holidays of 2014 the sets being released now will have almost no prime retail space allocated to them, (perhaps a couple of the rumored summer sets, but likely not a lot of the sets currently on shelves) and it will be up to children to specifically ask for these older sets.  Conversely, had the movie been released in, say, early November, I could see the shelves being emptied during the holidays and a little more momentum for the theme.

3) Lack of minifig desirability One of the biggest drivers of quite a few popular themes are the minifigs.  Look at the selling prices some superheroes or LOTR or SW minifigs are going for and you can see that the desirability of certain minifigs can make or break a sets investment potential.  My concern is that the collectible minifig line as well as the minifigs in the sets themselves are not going to be commanding high secondary prices, thereby limiting one significant factor in secondary market growth.  They aren't bad by any means, and some of them are downright awesome (I like the ice cream vendor guy) but I don't see them being as popular or collectible as licensed-theme characters.

4) Kid-focused movies have a history of investment woes.  Check out a sampling of some past Disney made movies.  Yes, you could argue that Lone Ranger wasn't 'for kids' - if you believe critics its target demographic was essentially no one - but it was a supposed blockbuster in line with POTC and POP - maybe not directly for little kids, but I'd wager they were looking for a lot of younger folks buying tickets.

 Some interesting observations here - most prominently, that Disney makes pretty successful (nay, very successful) flicks with some astonishing box office numbers.  With numbers like these, it seems obvious that Lego sets tied to these franchises would have huge investment potential.  From what I can gather, however, is that no matter how many people go to see a movie, it doesn't always translate into investment potential.  Outside of a couple of real investment winners, these themes are not places any investor would like to tie up funds.  In looking at these numbers, is anyone else concerned that the Lone Ranger was BY FAR the worst box office-rated movie in the Disney lineup, which features generally poor performing sets?  I know there has been some love for a few of the sets in these forums, but despite all the love I'm still leery.  A super short run might help, but I'm still not convinced there is solid investment potential in LR or any other Disney-movie-based set that isn't a form of transportation.

5) Set overload

I get that TLG is ready to put a huge push to make this movie a success.  I think that perhaps free of paying huge, licensing fees for other lines, TLG was literally like a kid in a candy store, but the store was a factory with Lego-making molds.  Does a release of this many sets all at once dilute interest or drive children to try and collect them all?

Pros:

The 2 in 1 sets are very cool.  I think that for a lot of builders these are must-owns.  Even with the ice-cream-loving Heartlake gals being considered, I think it is unlikely we'll ever get another Lego Ice Cream Truck (with awesome minifigs).  I also think this will be the only plumbing truck we get, and every Lego cityscape needs jobs for their minifigs that don't involve fire or police work (or being chased by said police).

Overall, I have quite a few concerns about this theme, and none of them likely concern TLG.  I'm comfortable predicting the movie will be quite successful and even with possibly smaller sales of Lego sets (compared to licensed or very popular themes) the fact that there are no licensing fees means TLG probably needs to sell a heck of a lot less than, say, LOTR sets, to make a profit.  I am interested in the larger rumored summer wave of sets that might (edit* will) see a very large classic space ship and Metalbeard's Sea Cow, which are larger and might appeal more to AFOLs, but for this first wave I'm not very optimistic that there are a lot of winners in this set.  Tread carefully!

Also, feel free to tell me why I'm wrong about this line and how it is going to set the secondary market on fire!  Since we're still in the infancy of this theme, there is plenty of room for dissenting opinion and I'm certainly no Lego Nostradamus.  Still, not every theme can be an investment winner - for each set above the CAGR% average there is one below, and the trick is recognizing which side a theme is destined for.  I'm giving it the investment equivalent of Romans giving gladiators two thumbs down - investment death.

Original Idea by rcdb1984

"Turboflipping is an original term coined by rcdb1984"

Whether you are new to the LEGO investing game or a seasoned pro, there is one thing that will always remain constant: a desire for fast and "easy" profits. As you probably know, however, most of the time to earn significant amounts of money you will need to hold your investments for a relatively long period of time depending on your target return, but there are some instances where you can take advantage of market shortages and make a generate some quick capital.

You may be wondering, understandably as it is a completely new term, what is Turboflipping. Odds are a lot of you had already done it in the past, as it only involves purchasing newly released sets and listing them for sale at a markup as soon as humanly possible in order to secure a profit. For example, let's take the newly released Maersk Triple E 10241:

The newest iteration of the Maersk container ship has a MSRP of $ 149.99. Having said that, being a newly released exclusive the only place you could really order the set from is LEGO S@H or by visiting your local LEGO B&M store, where available. Furthermore, if you were paying attention on the day the set was officially released to the public, S@H sold out in a matter of a couple hours with a expected ship date of almost a month later, giving those who were quick to order a somewhat comfortable window to sell theirs at a higher price. Want some hard data that backs up this claim? Let's take a look at the 5 latest Sold listings on eBay at the moment:    

As you can see, there is a clear opportunity to make some money on the set from people who for X reason can not wait to get their hands on what is, in my opinion, one of the better looking sets released by TLG in the past couple of years. Now that we got the basics out of the way, let's figure out how to make this process work for you. From my point of view, there are a number of ways to set up a tactic and make money on new releases:

1- Setting up pre-orders: You have probably seen a number of listings for to be released sets around a month in advance to their official release. Obviously, the sellers expect to sell desirable sets without having them in hand and either ordering them at midnight the day of release or waking up really early to be at a B&M location to pick them up. Let's examine the pros and cons:

2- Ordering online at midnight on release day: This method entails waiting until the set is officially released and as soon as it is available purchase as many copies as the limit allows. As said before, some very desirable sets go out of stock in a very short time and usually take a long time to be re-stocked, giving you the opportunity to capitalize on the shortage. Also, and only if you are comfortable, you can set up the listing on eBay a couple days before the set is released and just drop ship it once it goes up for sale.

3- "Opening" a B&M location: It's 8:00 am and you are eagerly waking up to drive for half an hour to get to your local store and pick up as many newly released sets as you possibly can (bringing all of your kid's friends to help you as a cover). You grab several sets, pay and just as you leave the store you open up the eBay Mobile app and list all of your purchases for sale at a substantial mark-up. Turboflipping at its best.

There you have the 3 generic tactics you can use in order to flip newly released sets. Which one you use is completely up to you! Graphical representation of prices for to-be-released and newly released sets based on BP Data:

Having read the article up to this point, you may think doing this all the time with every set makes sense; thinking this way is a sure way to be disappointed. Take a look at some sold listings for the Sidney Opera House during its first couple of weeks:

While at first sight it may look that the sellers were able to make some money, assuming they purchased this set at MSRP and ignoring taxes leads us to the conclusion that very little profit, if any, was earned from this venture. When you are talking about a $300+ set, earning less than $30 (and even this is low by my standards) can only be cataloged as sub-par.

This example only points out something that everyone interested in LEGO selling should have clear by now: there is no such thing as 100% easy money. Even flipping this way involves some research both about the sets to be sold as well as the most efficient method to complete the sales. While trying to flip larger and iconic sets may seem as a great idea, sometimes you can maximize your profits by flipping several of the smaller, easy to ship sets like the DeLorean or Minecraft.

Notable turboflips of 2013

Set
	Mr. Gold
	41999 Crawler
	DeLorean

Interesting to note is the case of 10227 B-Wing, as it gave sellers a 2nd opportunity at flipping it immediately after the May the 4th discounts. What does the future hold? No one can really tell what the next successful new release will be, but if I had to guess I would put my money on the rumored UCS Sandcrawler and Slave 1. Both of those ships are SW fan favorites and would be appearing on the UCS lineup for the very first time. I really don't see how you would not be able to sell these for a substantial mark-up during the first couple of weeks of their release, as they will for sure sell out very fast. The re-hash of the Mos Eisley Cantina may also be a nice choice.

I really hope you find this article useful or at least interesting to read, and I would like to thank rcdb1984 once again for suggesting this article and his help developing it.

Thanks for reading!  

As mentioned in other blogs and some of my forum posts, I have begun a Lego business online using an Ebay Store. A large part of my business is from parting out sets; The practice of of selling the minifigures and certain desirable parts of a set (like a vehicle or building) separately to make money on the set. This is a very common (but time consuming) practice for many different people ranging from businesses to people like me. On the outside, it seems like a fairly understandable, and even helpful, practice. Let's say a giant new set comes out, like the Jabba's Sail Barge 75020 at the $120 price point. This is a refresh, so there may be people who already have the original and don't care for the new one. However, this one has an exclusive Max Rebo figure in it. So, they jump on Ebay and pick one up for 15$, not having to purchase the whole set they don't want to get that figure.

In the same manner, a kid sees the 70505 Temple of Light set and loves the Golden Mech, but does not want the full set nor do his parents have the money for it (70$). So the parents get on Ebay and grab it for $20. It is not hard to see the benefit here. So why would The Lego Group(TLG) be against it?

In the last year, we have seen TLG tremendously crack down on re-sellers not using their reselling program, investors, and most other types of Lego Business. The obvious reason for battling people who part out sets is they want people to buy the full set. However, past that it just seems as if TLG does not like other businesses making money by "rearranging" their products - which is somewhat understandable.

So, why do I think this?

The Evidence

It took me a short while to start coming to this conclusion. When I started my parting out business, I picked up a lot of the newer star wars sets to start with. I got used to a minifigure in 3/4ths of the bags, separated for the most part. After a while, I picked up a few Ninjago sets, specifically the Epic Dragon Battle 9450 and UltraSonic Raider 9449. These were released a couple of years ago, and well before the Star Wars sets. In these sets, the figures were all in the first bag! This made it incredibly easy to part out as you weren't opening 4 or 5 more bags each set.

I got a little curious about it, and decided to pay attention as I started to open more sets. All of the older Ninjago sets had their minifigures all, or mostly all in the first bags. This would serve as a control. In December, new Ninjago sets came out which I knew would tell me what I needed to know: Mainly if I was just being suspicious for no reason, or if something is actually happening. Sure enough, the three sets I have parted out so far - 70723, 70724, 70725 require the opening of 3, 4, and 4 bags respectively.

I do not have a ton of older sets to compare it to now, since most of them are now retired or not worth parting out - but I did notice some more: The 9468 Vampyre Castle does not require more than one bag opened nor does the 10228 Haunted House. The newer set results are impossible to ignore. Here are a few of the interesting sets showing this point that are more recent:

• The three Ninjago sets mentioned
• The new Hobbit Sets 79011, 79012, 79013, 79014 all require multiple bags to be opened - 2, 2, 3, and 4 respectively.
• Arkham Asylum Breakout - 7 of the 9 bags have to be opened.
• 75021 SW Republic Gunship -  6 of the 9 bags must be opened.
• 10236 Ewok Village - Somewhere near 100 have to be opened.

I have also noticed that the minifigure parts inside each bag have become somewhat randomly placed. For example, the Black Gate 79007, requires all 4 bags be opened. In bag 3, you must put together a simple 5 piece orc. Normally, torso and legs are in the main bag and the head, weapons, and small pieces are in the smaller inner bag(s). In this bag, the legs to the orc are in the smaller parts bag. This is somewhat peculiar, already because there are two close-to-identical orcs in different bags, but the legs for the other orc are not in the smaller parts bag.

On top of this, a lot of larger sakout.ets with tons of minifigures now have more than one bag with the same number on it. This means you may have to open more than one bag...just to open one bag! This is the case with the Ewok Village and Arkham Asylum Breakout.

Why would TLG do this besides a Conspiracy?

To be fair, as a builder I really like this. It is definitely fun to have a minifigure in each bag and I think that opening all the minifigures in one bag can sometimes make the rest of the set seem duller - especially if the minifigures are the main draw. As far as for younger builders, I think this keeps them interested through the whole thing.

It is possible as well that this is just a process/manufacturing thing for TLG and the minifigure placement, and part placement inside the bags is just becoming more efficient, and for some reason the current configuration lends itself to that.

Another very plausible explanation is to guard against theft. We have all heard the stories about people punching out corners of the box and removing the minifigures. It is obviously much easier to do this if you can just swipe a whole bag rather than having to open 7 or 8 of them in a busy store.

How much worse can it get?

In the current sets, while I prefer the older configurations with all minifigures in the first bag, things are not too bad. After you open a set a few times, you get used the set and remember where each piece is in each bag. I timed myself opening two similar sets to prove this out: 9449 UltraSonic Raider and the Dol Guldur Battle 79014.

• 9449 took 5:46 (this is building all minifigures and packing up the raider)
• 79014 took 10:23 (building all minifigures and packing up the rest of the set)

Definitely a considerable difference. 79014 took almost 2 times longer to separate. As we know, in any business, time is money and this is definitely a huge toll on anyone looking to part of sets. But can it get worse?

In a word... yes.

• TLG can easily continue to separate minifigures even more inside the packages themselves.
• A lot of bags contain 2 smaller packages. TLG may start putting a piece of each minifigure in each bag.
• They could start individually wrapping each part of the minifigure in the bag itself (they do this in certain cases now) meaning that each part would have to be unwrapped.
• New minifigures may end up showing up in multiple sets meaning less exclusive minifigures that command high prices. They could refrain from changing minifigures expressions or outfits in different sets.
• Instructions and parts for different pieces (like one modular from the minimodular sets) could end up in different bags or in a abnormal arrangement making it almost impossible to part out sets in that manner.
• Selling minifigures separately themselves.

Would they do this? I think there will be a point where this would hurt their business more than it would be deterring people from making money from their product. For that reason, I only see them continuing to play games with packaging the minifigures in weird ways. I really doubt that TLG would make it harder for builders just to keep a few entrepreneurs from making a little by being creative.

Other problems to consider

There are bigger concerns than a set just taking longer to part out. With different parts in different places, I routinely find myself missing a part and having to go back and figure out where it is. On the more complicated sets, I have definitely had more Ebay Buyer Protection cases opened because I left a small piece off a minifigure. In reality, I forget some pieces because I get so frustrated trying to find every little piece. The worse this gets, the more vigilant we will have to be to make sure we get everything correct.

If TLG decides to go an even more drastic route, like limiting exclusive minifigures or even selling them separately themselves, the business as a whole is in jeopardy. I will attest that there are certain sets, like the Funhouse, that are very tough to part out just because so many people are doing it. If minifigures are now found in more and more different sets, you may have to get a set at 50 or 60% off to make parting out a worth while venture. Just look at values for figures like Harry Potter, Frodo and Bilbo Baggins, Gandalf the Grey, etc. and you can see how these values are killed because they appear in so many sets. Not the same as the values for figures like Azog, Pre Vizsla, Max Rebo, etc.

How can Parter-outers fight back?

First off, there is not too much we can directly do - it's TLGs product and they certainly have a right to package things and organize them how they want. However, there are some ways you can cut down on the pain this causes you.

• If you already have a set parted out, have it handy (or pictures) as you part the next one out
• In addition to the above, doing the same set a bunch of times in a row really helps as you get in a grove and cut down on your time significantly. My wife helped me one day with 10 of 3 different sets. By the time she got to the 4th or 5th of each one, she was flying and didn't miss a piece.
• Have an extra of each set you part out consistently on hand so that if you miss something, you will have an extra to resend out to a buyer while you try and find it.
• If you get tired or frustrated - TAKE A BREAK! I have noticed this really helps me. I actually will sometimes work out and part out sets funny enough. I do a set or two of weights, then open up a set. Gets me in a groove and I relieves the stress.

In conclusion, it is very possible that all of this is imagined and I am just pushing a conspiracy that is not really there. But, either way, we can't ignore that newer sets are getting harder and harder to part out quickly - that much is clear. If you do and do not stay vigilant towards these concerns as TLG possibly takes more and more drastic steps, it could be your Lego business that is in parts.  

So, you have been buying LEGO sets non stop over the past few months, maybe even years, and you have noticed your Brickfolio has increased in value by 10,000% (exaggerating just a bit here). Or maybe you are a short term investor looking to make some "quick" money to fund your own collection or long term investing choices. It can be sort of difficult to decide how to start selling some of your inventory, as well as where to get the most cost effective materials so that you end up with more money in your pocket and less in other people's, So I decided to write this very basic guide to help some of you start selling ASAP! Hope you find it useful.

Note: I will continue making the assumption that you will be selling your sets on eBay, as that is by far the most common marketplace talked about in the forum.

1- Materials

   One of the most important decisions you have to make before you start listing items left and right is where to get your materials. Things like packing paper, boxes, envelopes and so on are an essential part of your LEGO business, and you will need to carefully evaluate exactly what you need and where to get it for the lowest price possible.

First off, you need to evaluate what's the core of your business inventory, as shipping/packing materials will vary greatly from seller to seller. If most of your inventory consists of polybags or loose minifigures, then most of of your packages will need to be bubble mailers and small ziploc style bags. On the other hand, people who focus on set will have to research a little bit more and purchase a variety of boxes that fit a particular LEGO set size.

Following you will find a list of what I currently use for each particular type of item in my inventory, as well as a small description and where to get them (With their own BP Affiliate link in case you decide to purchase!)

• Polybags, loose minifigures and individual bricks/parts

These three categories fit perfectly under one section, as they often require the exact same amount of effort as well as shipping materials. If you have sold any of the three items mentioned above, you know that most of the time you will need to work with tight profit margins, hence the importance of picking the right vendor and quantity. Most of the time, this involves purchasing larger quantities even when you might not have an immediate need for all.

Here are my choices:

- 2x2 Self lock bags ($ 6.86 / 1,000 units / $ 0.007 per unit)

As you can see, these little bags are extremely economical once you calculate the price per unit, basically adding less than 1 cent per sale. Of course, these are not essential to be able to ship figures or bricks, but I would strongly encourage you to give them a chance for a couple of reasons. First, depending on the type of envelope you use, your minifigures may not be sufficiently protected against the elements (rain, etc); this can have a very negative effect on the condition of the figure, especially those that include unique elements like capes and such. Second, these little bags make a seller look more professional and careful in the eyes of the buyer, a couple of factors that might help you with future sales.

- 4x8 Kraft Bubble Mailers ( $12.10 / 100 units / $ 0.12 per unit)

Unlike the previous item, this is one thing you really can't avoid having. There is no best way to mail small items than small bubble mailers, as they require very little postage and help protect your items from damage during shipping. At around $ 0.12 per mailer, I really believe you can't go wrong with these, and it would make more sense to even get the 500 ct if you really have that much in figures or bricks. It is important to note that 4x8 mailers can also be used to ship most polybags, while you might need to get a larger mailer for special ones like the mini Camper Van.

• Sets

With sets, things get a little bit tricky as there are multiple different sizes that make selecting a proper box a little more time consuming. Thankfully, some sizes will allow you to fit a variety of them without needing to get 3 or 4 different types of boxes, and that's personally they way I have chose to go with in order to reduce the time I spend worrying about that. I deal mostly with 28x16x7 boxes that fit most sets in the medium to large range, while recycling and using USPS free supplies to ship the smaller sets.

There has been a lot of talk about where to buy shipping boxes, and we usually hear about Uline, Staples or similar stores. If you are going to buy more than 20 boxes I would definitely recommend to order at Staples to pick them up in store for free, while you can always choose either them or Uline if you are getting a pretty large order shipped  in order to spread out shipping costs.

Most of the time though, small to medium sellers may need less than 100 boxes, and for that amount Amazon actually offers a nice option to purchase them (usually with Prime shipping) for pretty much the same price as bulk sellers like Uline. If you check the link below, you will be able to purchase 20 boxes (28*16*7) for around $45. These are pretty good quality and the ones I personally use more often.

- 28x16x7 Shipping Boxes ($44.87 / 20 units / $2.24 per unit)

Compare to Uline ($47.8 same Qty and Size)

- Scotch Shipping Tape ( $ 9.97 / 4 Rolls (215 yards total) / $2.49 per unit)

Another essential item, shipping tape. I have tried a variety of different brands and types and have found that this particular one is the one I liked the most. It might not be the cheapest one out there, especially if you search on eBay and get some generic tape, but they match what I'm looking for in respects to quality and duration. Unlike some other brands, I really don't need to use that much tape to completely secure  a heavy shipping box, and that gives me the peace of mind it will get safely to its destination.

As said before, you will be able to find cheaper versions out there, but in my opinion the quality of most is sub-par.

• Misc.

The following is completely optional and not really needed, but I have been using it for a while and find that it saves me time and sort of streamlines the process of packing both sets or smaller items.

- Avery shipping labels ($ 26.95 / 200 ct / $ 0.13 per unit)

These labels are really high quality, and even though they only come in the 200 ct packet for Laser printer (50 ct for inkjet) I have been using them on my inkjet printer for quite a while with no problem whatsoever. I really like to just print the label and immediately paste it on the package without having to tape over the label to attach it, and these have the added bonus of blocking any other label previously applied to the box. Basically, you can recycle any of the boxes you receive by simply pasting the new label over the old one. (Not all self adhesive labels do this well). For an extra 13 cents per sale, I find them a really good value.

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And that's it for now. Again, these are the materials I personally use, so feel free to add your own recommendations in the comments section. I hope that at least some of our most new sellers are able to benefit from this basic information.

Thanks for reading

I think at this point, we all know about all the scams that exist out there that we must tread as Lego buyers: Drop shippers, shipping scammers on Ebay, Craigslist scammers who want you to wire them money, and even companies that are somwhat deceitful in their practices.

But there are more parts to being safe as a Lego Investor/Collector that we must be aware of: CyberSpace issues. It seems silly that this amazing thing called the internet has brought us all of this joy, made this site possible, and absolutely changed the way we do everything to do with our money, could also be the thing that ruins us completely. I am a member in this industry as a networking engineer. I have studied CyberSecurity quite a bit and it is something I want to eventually pursue as a higher level of education in my field. It is a fascinating field and we are in the golden age of CyberSpace growth.

However, the unfortunate realization of living through this era in technology is how woefully behind the Cyber criminals we all are. For one, everyone has to react to the new things they do. We wont be able to just guess what they are going to do next: they are calling all the shots. On top of this, our economic systems, our credit systems, and most of our business industry is not built to cope with how fast people are coming up with ways to game the system.

So do we just shut down and not buy on the internet? Of course not, but we can be smart before making certain decisions. And most importantly, we can be vigilant for the inevitable times that this happens and be ready to act to correct any issues we come across. Here are some thoughts in this direction:

Don't use any service unless you know it is secure.

This is a tough one; how will you ever know for sure? Well, you won't. But you can make a pretty good decision with a little bit of research. Paypal and Ebay both offer buyer and seller protection. They both have great track records in the field as well. Things like Western Union and other money wiring services have a history of being scam vehicles and the companies themselves have a track record for saying "its not our problem". Only use things you trust for your transactions.

Do not put in purchasing and credit card information into a website on a Public WiFi connection

This is one most people don't think about. You are sitting at StarBucks and you jump on WiFi. See a great deal on BP deals page and click the link. You put in all your credit card information and make the purchase.

Unfortunately the guy next to you, with little effort at all, can see every little bit of information you type into your PC or phone with free programs downloaded on the internet. Its unbelievable how easy it is for someone to do this. Yes you are protected by your credit card company most likely, but is it worth the trouble thinking about it?

In general just avoid it. If you are on your phone, it is worth switching to data for the purchase.

Set up credit card alerts

This is a extremely simple one with how many people have the ability to text on their phones. I don't know an actual statistic, but I would say the majority of people on this site who use credit cards a lot have had a fraudulent charge once or twice. My wife's card was stolen out of her supposed-to-be-locked classroom at school once, and before we knew it they had rattled off a grand in purchases. Most credit card companies now have pretty robust alert systems. Everytime I make a purchase, my credit card companies texts me and says my card was authorized for this amount of money at this location. I immediately know if something is not right and can actually reply and say "this isn't me!".

I can also keep better track of what my Wife is buying

Get a credit monitoring service

These are annoying. The credit monitoring and reporting companies have about turned into insurance companies as far as commercials go - except no one can beat Geicos Hump Day. They do serve a great purpose though. Whenever I do anything that has an impact on my credit (or if someone else does) I immediately get an alert of exact what the inquiry was about. I pay 10$ a month for it and it is very much worth it.

My wife did not have it and someone stole her identity and massacred her credit. It wasn't her, so no big deal right? Heh - I wish. It took more than a year to get her credit fixed back to where it was supposed to be. This being right before we were about to buy a house, we had to drop her from the loan because she was dragging my credit down!

Think about the effect this could have on you if it happened. All of a sudden, your credit cards get frozen, you can't open any new ones, and you can't purchase those lego sets like you used to. Most monitoring services also offer services where they will help you fix credit problems much quicker than you could ever do on your own.

Be smart with your passwords for all those sales sites

So many people carrying legos now means more and more people have your personal information from all those sweet deals you have gotten. Unfortunately, we just have to trust them with it.

However, we can put ourselves into position to keep ourselves as safe as possible. Passwords really come into this. Everyone has heard it - change your passwords every 90 days, make sure they have special characters, blah, blah, blah. I am not preaching that at all.

Actually you should absolutely use a password that is easy to remember. And unfortunately, special characters and numbers really don't mean a lot at all to a password's security. Passwords are normally cracked when attackers steal the payload of a password exchange between a site and a user and run a password cracking program on it. So understanding how this works is important. In most programs, you give the application a list of common possible words or letters and then let it try all its possible combinations. For example, some may feel this is a good password:

p@ssw0rd!

By adding special characters into the application, a password like the above could be broken within less than a minute in most cases.

Whats the answer? More complicated? Simple actually : longer. The more letters in a password, the more time (exponentially) it takes to crack it (which means people give up). So I use phrases for passwords - spaces included. Consider:

I love to use brickpicker for lego prices

A password like the above is insanely more secure, even without special characters, and most people don't insert spaces into password cracking applications by default. Plus they are really easy to remember!

On top of this, do not use the same password for every site - or at least spread it around pretty well. If you do, one is hacked - they all could be. Now maybe the attacker wont know you are on entertainment earth and toysrus.com - but the first thing someone does when they hack a google password is take the same user and password and pop it into paypal, ebay, major bank sites, etc. Easier to just avoid these problems.

Conclusion

Its an unsafe world in general, and we have to live with it. There are many more ways things can go sour for people like us who spend a lot of money, and most likely have a lot of credit and spending habits that are harder to track. But by being vigilante, we put ourselves in a position to prevent issues from happening, and ultimately be able to react when they do. Though Cyber space has brought all these new worries upon us, we still have the Human intelligence to stay ahead if we consider and study the consequences of not doing so.

Thanks for reading.

So I wanted to write up another article about drop-shipping scams, specifically on Ebay, that looked more at the problems it causes to everyone, not just the people directly involved. I will spare you the long explanations of drop-shipping scams and how they work as they are covered in great detail in two articles shown below:

Drop Shipping Lego: How to Avoid Being Scammed – By Talon http://blog.brickpicker.com/drop-shipping-lego-how-to-avoid-being-scammed/

Lego Larcency: Scams, Schemes, and Shady Practices – By Ed Mack http://blog.brickpicker.com/lego-larcency-scams-schemes-and-shady-sales-practices/

A quick explanation of a drop-shipping scam: Someone sells a set on Ebay or another site, usually for less money than the retail or normal price of the set. Once the listing has sold, the seller purchases the set fraudulently from somewhere like Lego.com, Walmart, Target, etc. and has it shipped directly to the buyers residence. By fraudulently, I mean using a stolen credit card, a credit card opened in someone else's name, or through other types of identity theft. In this article, I wanted to discuss more about the effects after it happens and how it affects everyone.

Before I start, I want to make it clear that these are my opinions that I fully believe in. You are absolutely welcome to disagree with them – and you may be right. Please, if you do, do not take offense to anything I said. Voice your opinion. It is only in debate and discussion that we become more intelligent. Read the addendum's as I would like to personally hear everyone's opinion.

It may be human nature, but I think a lot of people (myself included) are like the 4 main characters of Seinfeld in certain situations. We are friendly, decent people, who are really only concerned with ourselves. This doesn't mean we don't care about other people, but more that we are generally unconcerned with things that happen unless we are directly involved. One of my favorite Seinfeld episodes, the series finale, depicted this in a perfect light. Jerry and the gang were walking down the road when they witness a person being robbed. They shrug it off and walk away. Eventually, they are arrested for breaking the “Good Samaritan” law that stated if a person witnessed a crime, they must intervene in some way.

I know if I was walking down the street and saw someone being robbed, I would be very hesitant to run over and just immediately involve myself – and I am sure most of you would feel the same way. But, imagine if you recognize the person committing the crime. It happens to be someone you walk by every day on the way home. At any point in time, you could be involved. There is no guarantee you ever will be, but suddenly the situation has changed. It now directly matters to you this person is stopped and caught.

This is a strong example, but can help illustrate the points some of us bring up about drop shipping scams and the issues that arise from them. If you use Ebay, if you use BrickPicker, and if you use a bank, all of these things affect you much more directly than you may understand. Hopefully after reading this, it will allow you to put in perspective some of the issues that arise from not being the "Good Samaritan". It is not only that I discourage you ever knowingly buying one of these listings, but avoiding the situation completely, and possibly taking action to help defend others. Here are the different people involved directly and indirectly by this epidemic and how they are affected:

The Victims of the Fraud:

This one is fairly obvious – if someone is using stolen credit cards to purchase items fraudulently, then the people who's credit card/identity is stolen will eventually have to deal with that. Yes, some people have credit cards that protect them from fraud or help them recover losses, but the victims are still affected by the fraud's occurrence. It means calling credit card companies, checking your credit report (which is not free though it is supposed to be) constantly for the next several months, calling the IRS to make sure nothing else has been stolen, and the flat out worry every time you put your hand on your wallet. If you have ever been the victim of identity theft, you know what I am talking about. Personally, my wife had her identity stolen and the person destroyed her credit. It took her 6 months to sort it out, and there were some things we were told would never be pulled from the report.

How it affects you: It can happen to you. Most people think if a credit card is stolen, that person did something stupid like filled out a form online to win 20 free Ipads, 10 puppies, 3 enchiladas, and a van down by the river. It is flat out not true. You can have your credit card, identity, and much more stolen at any point in time.

I work for a large Networking company as a network engineer in a customer/business facing position. Everyday, I work in business' networks that are flat out insecure. Yeah, they have some dinky virus protection and a few passwords, but anyone who had an inch of network security training could easily break into their network and steal data. Many of these companies have credit card information stored on servers in these unsecured networks! If these are broken, it doesn't matter how smart the people that shopped with this company are – they go down as the company goes down. Don't believe me? Read on friend!

Anyone here heard of Sony? The Play Station Giant last year had their network broken into – and a good amount of the credit card information stolen because it was stored in PLAIN TEXT. Like the text you are reading. My card was there and was stolen with it. The fact is, as “safe” as anyone thinks they are, if you have ever typed your credit card information into a computer, you are at risk.

Source: http://en.wikipedia.org/wiki/PlayStation_Network_outage and its listed sources the internet.

Note: This is not to discourage anyone from using credit. Don't turn into a hermit, this is just a reality people need to understand. If you shrug it off when others are defrauded because you would "never fall for that" or "are protected", you are unfortunately very mistaken. If you have more questions and are not convinced you are at risk, feel free to PM me. I have quite a bit of experience and training in CyberSecurity, and I know some things that can make you cringe every time you log on to anything that uses the internet.

Why you should care: If you see this happening and say “who cares, it doesn't affect me”, wait until it does happen to you. Think about it in this way: Imagine you have something stolen from you. The person who stole it sells it to someone who knew it was stolen, but wanted it anyway because it was a great deal. The thief then returns to your house to steal more items, because he knows he has someone to sell to who could care less how he gets the items long as they get great prices. This is what you are doing if you don't care that you are purchasing an item on Ebay that is more than likely a scam.

The buyer who purchases the merchandise:

I will not cover this as in depth because the other two articles I mentioned gave specific examples. I don't want to reiterate those articles and those points because their articles deserve the traffic and they most likely stated it better than I did anyway. Basically though, if you purchase something that was originally bought fraudulently, it will most likely come in your name as if you made the purchase. For example, I recently received a purchase from Ebay that was shipped from the Lego store. The only thing on the invoice that was not a piece of my information was the credit card number. It looked like I just stole the credit card and purchased it!

If the police, credit card company, etc. investigate, they can seize the merchandise and question you about it at any time. Yes you are protected by Ebay or Paypal, but that doesn't mean it isn't a headache. If you think it isn't a headache, wait until you experience it. I have twice, and in one instance I had the original person whose card was stolen calling me trying to find out why I stole his identity!

How it affects you: If you shop on Ebay, you are susceptible to this. Are there sure fire ways to protect yourself? No. There are very good ways, covered in the two articles I mentioned, but there is no sure way to cover yourself. But the more these people are left to continue using the scam, the more scam items that are being listed. Eventually, there isn't a way to feel OK about buying anything anymore.

Why you should care: If you buy an item that you are fairly sure is involved in some type of scam, you are perpetuating this scam. You are encouraging people to continue defrauding people. If you sell sets, this is just competition against you that you can't compete with, because you aren't purchasing your sets with seemingly Monopoly money!

If you receive a set and notice it was drop-shipped, the seller paid more for the item than you did, and your name and information is on the invoice, act! Ask the seller about it! If you just say “Oh well, I got a good deal”, you are again encouraging the behavior. If you don't know what to do in this situation, I wrote an article on this very subject found here: http://blog.brickpicker.com/another-piece-of-information-about-lego-drop-ship-scams-what-to-do-if-you-have-already-fallen-for-it/

Anyone that uses BrickPicker:

Have you ever looked at the current market price for a set on BrickPicker? If you have, you have been affected by Ebay scams. BrickPicker pulls all of its market data from Ebay sales. If tons of people sell a set for less than it is worth because they are doing it fraudulently, this brings down the BrickPicker price to a level that is not actually a true representation of the market.

How it affects you: This was covered above, but think about this situation: You find a large quantity of a set in store on clearance for $50. You quickly check the BrickPicker price and it shows $60. You figure that there is no way to make enough money for it to be worth your while to pick them up. If this data is brought down by the fact that 50 new sets were sold for $40 fraudulently, it could hide the the true market value for the set is $70. You just missed aryone else.n awesome deal because of it. This is a very extreme example, but it is important to note.

Why you should care: This can easily be inferred from above. You want to have correct data to use when you search for sets. Think it will never get so bogged down that it will actually affect you? Take a look at 10225 R2D2 and the 10228 Haunted House recent sold listings for condition "new". You will see some pretty low prices, most likely drop shippers, bringing down the price for everyone else.

Anyone that uses Ebay:

If you use Ebay to sell or buy, you are negatively affected by this. This negatively affects all Ebay prices because these items are normally sold for less than the item's worth. Yes, there are times when someone sells a set for too cheap, or times when they just need the money, but the damaging ones are the brand new, MISB sets that are sold for used-like prices because they are not indicative of the "true" market.

How it affects you: Have you ever used the “completed listings” checkbox on Ebay to figure out what something has sold for? Let's say you are looking at a bunch of listings for a set you are selling and you list it for cheaper than it is worth because so many people are fraudulently selling it for cheaper. Similarly, if you are selling an item for the real market price and someone else is selling 20 sets for much cheaper, who will someone buy from?

On the other hand, you go to buy a set and you expect it for cheaper than you may actually get it. If you buy the cheapest listing, you are back to being directly in the line of the scam itself!

Why you should care: You are on this site, so clearly you like Lego. This all negatively affects Lego sales and the people who buy and sell them. If you use Ebay, you should want information and prices there to be correct. You should want to be able to purchase something with minimal worry that you are going to be involved in a scam, or contacted by the police.

Everyone who uses a Bank:

I don't want to get too much into high finance – for one I don't know everything about it, and I am not sure there is anyone that does – but banks in general offers things like “fraud protection” and “fraud coverage”. Basically, if someone steals your information and does something illegal with it, you are covered. Man doesn't that make you feel good? No reason to worry anymore.

That, unfortunately, is very short sited. It reminds me of another great Seinfeld episode where Kramer told Jerry that they could commit mg wrong.ail fraud because these big companies can just “write it off”. Jerry asked how, and Kramer said “I don't know, they just write it off”! IN the non TBS rerun world, that is not the case. Have you ever paid a credit card fee? Have you ever paid an ATM fee? Have you ever paid interest? Banks make money and are in the business to make money. They offer fraud protection as a way to help ease a customer's pain and get them to sign up for accounts and credit cards. And it is a good thing.

However, every time it happens, the bank takes a hit. Every hit it takes, the larger the Bank's expenses get, the more fees that are levied on those who use the bank. Those that never were involved in the fraud. Those that did nothing wrong.

How it affects you: Obviously, if you use a bank, you got my point in the original paragraph. But, let's say you don't. Have you ever purchased something from a store? Guess what they use: A bank . Which means they are charged all the fees from the fraud. This means they have to charge you more for their merchandise.

Why you should care: If you have any way of participating in the economy at all, you should care. This is one of the reasons why things get more expensive. This is why more and more people everyday are committing these types of scams. No one cares anymore because, hey, they are protected! And everyone hates banks right?

So what do we do? Buy nothing, never go out, and try not to ever interact with anything that takes voltage? No, just try to think before you purchase an item that is evident of a scam. Always ask questions. Always make sure pictures are there, the buyer has good feedback, the price is not “too good to be true”. Make sure the buyer isn't using a 5 day handling time. Ask for a picture of the item along with the listing Ebayer's ID on a piece of paper. Just use your brain – you are capable of telling the difference most of the time. If we work together, we can help put a stop to this. Don't use the fact that "it might not be a scam" to justify purchasing something at a good price. If it looks like a scam, even remotely, avoid it.

I want to make sure people understand – not just one of the drop-ship scam pieces of evidence means it is a scam. It is a combination of many of them. We all have to morally decide at what point we see these in combination and decide not to buy. But if you ignore this moral duty, I urge you to consider what I have written above and try to justify how you are not part of the problem. I don't mean for you to go out and report everything that looks like it could be a scam. But we are reaching a day and age where we, as informed members of the BP community have a duty to use our knowledge to the benefit of everyone. Yes, some innocent people may have trouble selling their listings, but if these people are not fraudulent sellers, they will be able to meet our demands without issue.And if you purchased something that turns out to be a scam, you are not a bad person. But don't just ignore it and put the box on the shelf. Act. Make calls, ask for a refund. Report the seller and the listing.

Let's be a part of the solution instead of part of the problem. Let's not be part of the crowd who just says “it's not our problem”. Because the fact is, if you live and breath in this world, it is your problem.se methods.

Note: All of the information here are my own opinions and are pulled from my experiences. You may or may not have success with these methods.

People are always looking for the next hot investment.  With today's volatile stock market and falling real estate prices, people are looking for someplace safe to invest their money.  I'm here today to make a case for LEGOS.  That's right, you read it correctly...LEGOS.  Hard to believe?  Maybe, but let me show you some interesting tidbits and data that help me substantiate my claim.

In 2000, LEGO was named "Toy of the Century” by Fortune magazine as well as by the British Toy Retailers Association, beating out such other classics as the teddy bear and Mattel's Barbie.  These simple, colorful and durable blocks have been around since 1958 in their current form and are more popular than ever.   The LEGO Group works with other top entertainment franchises, such as Star Wars and Harry Potter, to keep their ideas fresh and popular.   Fifteen 'billion' components are produced every year by the LEGO Group.  They even have a line of LEGO video games that are available on all current video game consoles.  Impressive, to say the least.

I know what you are thinking...How does this information make me money?  Well, first of all, it indicates that LEGO is a solid company that keeps up with the times and puts out a quality product.  Secondly, it shows that people, both young and old have a love affair with these little plastic bricks and will pass this interest to the next generation.   Both these ideas are important in building a strong foundation for the LEGO Group's future and gives an investor a little piece of mind when plunking down hundreds of dollars to buy a new LEGO set for investment purposes.

Before we look at the data that backs up the idea that LEGOs are a solid investment, let us discuss what LEGO investing actually is.  When I 'invest' in LEGOs, I usually buy a new or used set that is MIB(Mint In Box).  MIB means that the LEGO box was never opened or the parts used in any way.  The box is still factory sealed and in good condition and is stored carefully in a smoke-free and clean environment.  Investing in older and rarer sets that have been assembled(box has been opened, obviously) is also an option for investment, but for our discussions here, we are talking about sealed boxes.

When speaking of LEGOs as investment vehicles, I like to associate LEGO sets with stocks.  There are thousands of different LEGO sets, just like stocks.  Both can be bought and sold rather easily.  As with stocks, there are LEGO sets that are top performers when it comes to investment purposes and then there are your dogs, or poor performers.  But unlike stocks, most of the LEGO sets that have been created over the last 50+years have increased from their original MSRPs(Manufacturer's Suggested Retail Price) if they were kept in MIB condition.  That's more than a lot of stock investors can say.  How many times has a new company's stock price tanked soon after launch?  Too many to count,  I'm afraid.

Take a look at the chart below...

IMAGE	LEGO SET	RETAIL PRICE	CURRENT PRICE	% INCREASE
	10018-1: Darth MaulPieces: 1868	149.99	393.47	162%
	10019-1: Rebel Blockade RunnerPieces: 1747	199.99	713.75	257%
	9302-1: Community Builders SetPieces: 1670	179.99	73	-59%
	3724-1: LEGO DragonPieces: 1530	98.99	464	369%
	8466-1: 4X4 Off-RoaderPieces: 1102	119.99	412.5	244%
	10001-1: MetrolinerPieces: 782	148.99	275.28	85%
	3804-1: Robotics Invention System V2.0Pieces: 717	199.99	224.22	12%
	7317-1: Aero Tube HangerPieces: 706	89.99	94.17	5%
	6290-1: Red Beard RunnerPieces: 698	99.99	170	70%
	4709-1: Hogwarts CastlePieces: 682	89.99	161.98	80%
	8538-1: Muaka & Kane-raPieces: 633	69.99	61.4	-12%
	3451-1: Sopwith CamelPieces: 574	49.99	133.37	167%
	7316-1: Excavation SearcherPieces: 471	49.99	36.96	-26%
	6472-1: Gas N' Wash ExpressPieces: 470	49.99	114.09	128%
	8539-1: ManasPieces: 457	89.99	149.32	66%
	7186-1: Watto's JunkyardPieces: 443	49.99	194.35	289%
	6776-1: Ogel Control CenterPieces: 422	49.99	35.12	-30%
	6292-1: Enchanted IslandPieces: 419	69.99	143.75	105%
	8549-1: TarakavaPieces: 411	49.99	50.74	2%
	4708-1: Hogwarts ExpressPieces: 410	49.99	90.4	81%
	8465-1: Extreme Off-RoaderPieces: 365	39.99	79	98%
	8008-1: StormtrooperPieces: 361	34.99	41.5	19%
	8007-1: C-3POPieces: 341	34.99	67.75	94%
	4707-1: Hagrid's HutPieces: 299	29.99	44.35	48%
	10002-1: Railroad Club CarPieces: 293	37.99	359	845%
	6291-1: Armada FlagshipPieces: 280	49.99	104.81	110%
	10000-1: Guarded InnPieces: 253	24.99	75.08	200%
	8242-1: Slammer TurboPieces: 253	19.99	28.08	40%
	7315-1 :Solar ExplorerPieces: 242	34.99	34.77	-1%
	7166-1: Imperial ShuttlePieces: 238	34.99	84.96	143%
		2300.7	4911.17	113%

This is a chart of the 30 largest LEGO sets from the year 2001.  The year 2001 was chosen to show a ten year time frame when comparing the MSRPs to current values, which is a common investment time period.  Next to the LEGO set name and piece count, the set's MSRP and current market value according to www.BrickPicker.com are displayed.  After that, the percentage increase/decrease over a ten year time frame.  www.BrickPicker.com gets its information directly from eBAY auction results and averages out these results to get current new and used values.   eBAY is the most accurate source for used and older LEGO sets in the market today.  On any given day, there are 200,000+ LEGO listings on eBAY, both domestically and internationally.  LEGOs are one of the five most active categories on eBAY, which also includes collectible baseball cards, stamps, coins and Barbie Dolls as other active categories.  

As you can see from the data, over 80% of the LEGO sets increased in value, some drastically.  Some of the sets even tripled and quadrupled in value over a 10 year time frame, such as set# 10019(Rebel Blockade Runner) and set# 3724(LEGO Dragon).  That's some serious money if you had the foresight to purchase a few of these sets 10 years ago.  To put it in perspective, compare these 30 LEGO sets to the 30 largest US companies that make up the DJIA(Dow Jones Industrial Average), which is the benchmark for stock investing.  Back in October of 2001, the DJIA was at 9075.14 points.  In September of 2011, 10 years later, the DJIA was at 11153.98, for an increase of 22.9%.  During the same time period, the total increase for the 30 largest LEGO sets of 2001 is 123.5%.  That is over FIVE times the gain in value over the DJIA.  Impressive once again.  

To be honest, it is amazing how these 'toys' increase in value.  The world wide economy has been in a major recession for years, yet there are some sets that show 100-300% increases during that time period.  Www.BrickPicker.com has a feature, called the BRICK INDEX, that will show you the Top 25 LEGO sets/items that have increased in value the most over a 6 month time frame.  The BRICK INDEX also has another option that shows which sets have increased the most over their MSRP.  It is quite common to see 100%+ increases in market value in popular categories like STAR WARS and the TOWN(Modular Homes), even after a couple of years.  One reason for such an increase in value could be the fact that LEGO discontinues sets after a couple of years, thus creating a sort of a 'limited' edition for each set.  That, plus the fact that most of the LEGO sets are opened and built, not put away and saved to sell at a later time for profit, also increases their value.

Investing in LEGOs is not without its drawbacks, though.  As with any sort of collectible, the safe storage of the collectible is very important.  It is no different with storing LEGOs.  Although the actual LEGO brick is pretty much indestructible under normal conditions, the LEGO boxes and instructions need special care.  Due to the fact that maximum value is obtained when a LEGO set has a box and instructions that are in excellent and sealed condition, an organized and safe storage method is required.  A system of shelves in a spare room works well, but it takes up a lot of space and a lot of potential investors might not have the extra space to put aside for thousands of LEGO bricks.  LEGO boxes come in all sizes, but if you have a rather large collection, they start to take up entire rooms, unlike coins or stamps that take up minimal space.  Also, the storage area needs to be dry, smoke-free and out of direct sunlight.  The LEGO boxes also show shelf wear relatively quickly, thus reducing values even more.

Another issue that confronts the LEGO investor is insuring the entire collection. Insurance companies look at you like you have two heads when you tell them you want to insure LEGOs, but with some collectors and investors, they might have tens of thousands of dollars worth of bricks and boxes in their basement.  After speaking with my insurance agent, he stated it was possible to insure a LEGO collection, but a breakdown of the individual sets and their current market values are required.  A site like www.BrickPicker.com can help with a current market value of a person's LEGO collection by using their BRICKFOLIO tool.  The BRICKFOLIO tool of www.Brickpicker.com enables a collector to input their entire collection of LEGO sets and get up to date values for the entire collection.  It can be printed out and then turned over to the insurance company, so the collection can be insured under the investor's home owner policy.

Thus, in conclusion, it is this author's opinion that LEGOs are a worthwhile and fun investment.  Although it is not your typical sort of collectible like coins or stamps, LEGOs appreciate quickly if the proper sets are bought and stored correctly.  A site like www.BrickPicker.com can help show what LEGO sets are hot and increasing in value and which ones should be avoided.  Their BRICK INDEX shows the top value gainers in the past 6 months and from MSRP.  Now in days, online auction sites like eBAY are very useful in buying and selling these collectible LEGO sets.  Also, www.LEGO.com and www.Amazon.com are useful in purchasing new LEGO sets.  All three options are listed on the www.BrickPicker.com's SET GUIDE for comparison.  Personally, I have seen my own collection double in value over the last 3-4 years and that coincided with one of the worst economies of the last century.  LEGO investing is something that has gone under the radar for years now, with only a few smart people tapping into the market.  I'm here to say that everybody can get involved, even to a small degree, and make money from LEGOS...and have FUN doing it. 
Keep those bricks clicking...

Edward Mack
AFOL and LEGO Investor...

If you have used Ebay at all, you know how important Ebay's feedback and rating system is to the buying and selling process. As a buyer, when you buy an item from a seller on Ebay, you have a chance to leave feedback for that seller and rate their services. You can leave positive, negative, or neutral feedback for the item, along with a 100 word phrase to describe why you left the rating you did. You can also rate them from 1-5 stars in several areas: The item description, the seller's communication, shipping time, and shipping and handling charges.

As a seller, you have a few more limited options. You can only leave positive feedback or report a buyer, as well as leave a short summation of your choice. This was implemented several years ago after Ebay had issues with sellers waiting until the buyer leaves feedback as a sort of leverage in the feedback process.

So how is feedback calculated? Pretty simple. Ebay takes your feedback for the last 12 months and then calculates a feedback score, which is a number that represents how many listings you have received positive feedback minus any negative feedback, and the feedback percentage which is simply the number of positives over the total feedback. The 12 month data is helpful if you have a string of bad luck, or something of that nature, it wont be held against you forever.

So with that short Feedback crash course, you know everything you need to know now? Unfortunately, no. There are some pretty important nuances that can mean everything in the feedback and rating system. So here are my list of things to be aware of and remember as a buyer and a seller on Ebay.

Buyer

As a buyer on Ebay, you really have about 90% of the leverage in the transaction. Ebay is historically very protective of its buyers because of two reasons: There is not another site with the traffic that Ebay gets for sellers to switch to, and large numbers of buyers keep Ebay as the auction powerhouse it is.

Having this power can pretty quickly go to your head. You can rate and leave feedback for a seller and they don't have much recourse to keep you from doing it. On top of that, are there that many sellers that really check out a buyer's feedback? In general, you wont know who buys it until they do – so the seller has to make a complaint retroactively if they don't like the buyer.

So as a buyer, you can just do anything you want, right? In some ways you can, but I would definitely advise this going to your head. Buyers should be aware of the following things:

• Think about it before you leave negative feedback: If you have ever sold anything on Ebay, you know that some things just go flat out wrong. So as a buyer, you have to understand that too. Leaving a negative for something that was most likely out of the seller's hands is not fair to the seller. Let's say shipping takes a really long time for some reason. You contact the seller and they tell you that the shipping was delayed. There are some buyers who, in anger and impatience, leave negative feedback. This is punishing a seller for something they may not have control over – and this is what the ratings are for. If they are apologetic and communicative, make sure you don't unjustly punish them.
• If you consistently leave negative feedback for sellers, they can put you on their blocked buyers list. This is the seller's own list of buyers they don't want to deal with. Buying a lot of one type of product, like Lego sets, makes it inevitable that you will buy from the seller twice. If you happen to give bad feedback to a seller that has quite a few Lego items up for sale normally, you may lose out on some good deals. This is another reason why it is important to only leave negative feedback if the seller really deserves it.
• Along with the last point, some of the bigger Ebay sellers communicate and know each other in an online business setting. You think by irritating one seller, you are ok with everyone else? Unfortunately that is not the case. Buyers that are consistently unfair to sellers may have their account ID's spread around to other large sellers, telling them to block this buyer as they are too much trouble to deal with. All of sudden, you are having trouble getting those good deals you used to find.
• If you are about to leave negative feedback – consider neutral. Neutral doesn't affect their feedback calculations and you still get to write something. Unless the seller was doing something really improper, neutral is a way to get your point across. They don't get a positive rating and you show them you were dissatisfied, but you don't cripple their feedback over a smaller issue.
• Be careful when you rate a seller– the ratings have a big effect on the seller. Ratings determine how high Ebay shows a certain seller's item in "Free-for-all" searches. One rating that can really be a problem is the “shipping time”. If it takes a long time to ship, make sure before you leave a low rating that they didn't state it might take a while in the listing. Also make sure you ask them why it took so long as well. If they used USPS, it probably wasn't their fault.
• If you do decide to leave negative feedback, don't leave all bad ratings as well to spite the seller. As stated, these are a big key in Ebay's search results. More so, if certain ratings get low enough, Ebay may even suspend them as a seller for a period of time. Try to always rate the seller correctly whether you left them negative feedback or not.
• Make sure you always leave feedback and always rate the seller. Believe, me it is very nerve-racking for sellers to wait for positive feedback and ratings, as these help their Ebay listings appear at the top of searches (or not appear a the bottom). It is only respectful that you leave them feedback for their trouble. A while back I was selling quite a bit and trying to get my feedback rating up. This was before Ebay automatically rated people 5 stars in certain cases. I had a few customers in a row that rated me low on shipping time and shipping price – even though it was free shipping! After that, I had several who never left feedback or never rated me. My ratings were much lower than they should have been. I was just as irritated at the people who didn't leave ratings as the people that left low ratings.

Seller

As a seller, feedback is much more important to your life on Ebay. Where as sellers aren't really aware of a buyer's feedback, most buyers are well aware of a seller's feedback when they look at a listing. If you have low feedback or low ratings, you can expect that you are going to have a much harder time selling items. With low ratings and feedback, Ebay starts to limit your sales, lower your items in searches, and even suspend your account. So what are some things you can do as a seller to limit your chance of receiving negative feedback?

• Make sure your item is exactly as described and take clear pictures

You may think that taking pictures and having a really good description is something that is just imperative to get the best price. It affects more than that. If a buyer receives an item with an issue and it was completely spelled out in the listing, the buyer will have a harder time leaving negative feedback. For example, I bought a laptop charger for my laptop by just glancing at the listing and clicking Buy it Now. The title was a little misleading, but in the listing it stated it was just the end cord – not the power brick. I was irritated when I received it, but when I looked back at the listing I knew I had made the mistake. So I still rated the seller highly and gave them positive feedback.

• Communicate with the buyer throughout the process.

Ebay only allows someone to rate your communication if you actually sent them a message. Some people think it might be better to just avoid that so you don't have a chance for a bad rating. Unfortunately, that is not the case. Being a buyer, you are always waiting – waiting for the item, wondering when it will get there, waiting to see if it was as described. If a seller just sends a short message at each part of the process, this can make the buyer feel much more informed. My process is this: Send the buyer a short message congratulating them and thanking them when they purchase it, along with details about when you will ship it. Send them a message again the day you ship it, letting them know. After they should have received the item, send them a message asking if they received it and if they are satisfied, would they mind leaving you feedback and ratings (don't be pushy though as that can really be irritating to a buyer). This always works really well for me and a lot of times they respond and are very thankful. If a buyer is satisfied, the may follow the seller's account meaning they see new items that are posted. This could get you more future sales quicker!

Also, make sure if anything does go wrong – you have a delay in shipping, you can't ship it the day you were going to, etc. - that you tell them. They will know anyway when they receive it. Being upfront can help the buyer understand that you were doing your best and will reflect when they rate you.

• Make sure you use tracking and add a tracking number

This pretty much costs you nothing ($.20 if using USPS and free with the other two big carriers) and can really make a big difference to a buyer. If a buyer just purchased a $400 Lego set from you, they want to know when it is going to be there. A lot of sellers have tracking, but they never add the tracking number! This can irritate a buyer and, if anything goes wrong, could encourage them to have ill feelings towards you as a buyer, which you don't want.

• Respond to the buyer's messages as quickly as possible

If the buyer has a question and needs to send you a message, the longer you leave them waiting and in suspense, the more impatient and irritated the buyer may get. You don't want them to feel like this because it could reflect when they rate you. If they ask a question you don't know the answer to, just send them a message right back and let them know you will look into it. If you are actively selling things on Ebay, make sure you are checking your messages often. Chances are, if you have a smart phone, you can get notifications when you receive a message.

• Include a letter in your shipment

This is a very easy one to do and can make a big difference. It wont be too hard as as a seller to make up a small letter and copy it 1000 times to send out with items. Simply put your ID on it and let the seller know you are very grateful for them buying your item. Also, make sure you let them know if they need anything at all, or are dissatisfied, to contact you immediately. Let them know you have more Lego sets for sale as well! The buyer will feel a lot better about the transaction and may even purchase more from you.

• Offer free shipping when possible

People love free shipping – whether the price is the same or not. Also offering it automatically gives you a 5 star rating in that category. It is an easy way to boost your ratings. If you don't want to offer free shipping, always do calculated over a flat rate and then make it very clear in the listing you only charge them exactly what it costs to ship so they know you are not making money off shipping. If it costs $.20 less, refund them that $.20. It is a very easy way to get on their good side.

• If something goes wrong with the shipping, consider refunding them part or all of the shipping

If you are worried there is a delay or problem with shipping – I recall during Hurricane Sandy a while back, mail was delayed for over a week – consider refunding their shipping to them. This may offset any anger they have at you, whether it is your fault or not. It is a cheap way to make sure you get good ratings.

• Make sure you pack the shipment as well as possible

This is a really easy way to get negative feedback. We all know, even if you put “fragile” on a box, it still probably goes through the proverbial dryer during the shipping process. If you pack your item poorly, you are going to eventually get burned. Yes, maybe you smooth it over by refunding the order, or you have an insurance claim, but it doesn't stop the buyer from leaving you bad feedback. Don't take the chance.

So, as a seller, these are the things to do to help prevent poor ratings and feedback. Does this mean you will never get another negative? Unfortunately, no. So what do you do when you do get one?

• Contact the seller and resolve the problem

If you resolve the problem, you can lobby to Ebay and the seller for feedback revision. A lot of times, if you fix the problem with the seller, they will relent and at least change their feedback to neutral which wont hurt your rating. A lot of sellers receive negative feedback and are angry. They don't want to try and figure out what was wrong and just move on. This is a mistake, as most people are reasonable if you fix their problem.

• Always respond to negative feedback

I don't understand why sellers don't do this more. Most buyers looking at an item want it. They look through feedback to be sure they wont get burned. If they see a negative feedback, that takes a toll. However, with human nature, if we really want to buy something, we will make excuses like “well maybe that was a bad buyer”. What better way to put that though in than to respond! You can respond to the negative feedback and refute what they said. Don't be mean or disrespectful, just try and say what you did to fix it and apologize. For example:

Negative feedback: Item arrived damaged and had to be sent back

Rebuttal: Unfortunately item was damaged during shipment. Immediately refunded customer, very sorry

This type of thing will make a buyer feel better about the fact you got negative feedback.

• Use the block buyer list

Some people are just flat out unfair with their feedback. Don't believe me? Go look at a feedback profile from an account that has 1000s of feedback a month. Every once in a while, they will get someone who leaves a negative with “item was too expensive” or “didn't like item as much as I thought”. It is pretty outrageous.

Don't dwell on it. If you can't get it removed, just add them to your blocked list so you don't have to deal with them again. It will avoid future problems and you can get on with your selling. At one point, pretty much everyone gets a negative feedback whether it was your fault or not. Don't always take it personally or freak out about it.

That is my set of info today. Again, I implore people: Think before you leave feedback. Never do it in haste and only leave negative when the seller really deserves it. Because if you are a seller, you know how it feels to receive it when it isn't your fault.

Note: All of the information here are my own opinions and are pulled from my experiences. You may or may not have success with these methods. Thanks for reading!

Over the last few weeks I've been looking into understanding how the time you decide to purchase a set for investment factors into your real investment returns. After one of my earlier blogs on how discount amounts affect your returns I began to examine how in some circumstances buying at a higher price but later in a sets retail shelf life may be beneficial.

It’s all about the Time Value of Money and the Opportunity Cost of purchasing an item when your investment capital may be better utilised in another asset. Typically sets last 18-24 months on retail shelves before retiring. If you buy a set right after it is released there is a longer time you have to hold before any potential price growth is realised.

So is it worth buying something early on if you see it at a discount, or are you better holding off to by later on at perhaps even full retail just before EOL?

Well the answer is a “fence sitting” it depends. The level of the discount offered, length of time to EOL, expected growth rate, and the length of time you are likely to hold the set all factor into the answer.

Lets take a look at a recently retired set that we have good information for and try and use that as a bit of a case study:

10212 Imperial Shuttle UCS

This well known recently retired set was released for retail sale in Sep-2010 for a retail price of $259.99. It stayed in the majority of retail outlets up until the end of Dec-2012. That’s a retail shelf life of 27 months. Over that time we can get a good picture of any retail discounts available using the camelcamelcamel.com data that is captured from Amazon.com prices and is available here on Brickpicker via the set’s individual information page.

The pricing graph above shows all the discounts available at Amazon.com over the retail life of the set. There could well have been other discounts available at other retailers, but this is the best data we have available and often retailers match discounts with each other so for the purposes of this exercise it should provide us with a good set of data to see what impacts buying at different points will have.

The largest discount was in Dec-2011 where a 30% off deal was available for a very short time, maybe a day or only a matter of hours. Earlier discounts of 10% can be seen back in Feb-2011 with the latest very good discount to around $217 of 16.5% in June-2012. After that there was only the $259.99 retail price available right up until EOL, no clearance sales here!

The current market price for the set is $354.69 based on Brickpicker data to the end of May-2013. We can use this as the benchmark to see what purchasing the set at different periods gives us as a return on that investment to date.

To compare purchase points we can use the CMGR – Compound Monthly Growth Rate that shows us the month on month increase in price. If you bought the set on day 1 at release then you would have seen a growth rate of 0.98% per month for the 32 months right through to the May-2013 price. If you waited for a bit and pulled the trigger on that first 10% sale in Feb-2011 then you have a growth rate of 1.55% per month over 27 months. If you were lucky enough to catch the big 30% sale and get one for $181.99 in Dec-2011 then you’d have enjoyed a nice 4.00% growth per month for 17 months. However if you waited until the June-2012 sale and got one for 16.5% discount at $217 then 4.57% growth per month over 11 months would be your result. Even more surprising is if you waited until the very last month and got one at full $259.99 retail in Dec-2012 then you’d currently have a monthly growth rate of 6.41% over 5 months.

Very interesting results and we can graph the monthly growth rates at each purchase point using the line graph below.

The set has grown 36.42% above retail after retirement in 5 months. This means almost all of the growth is “squashed” into those later months. Therefore the later purchase points show higher percentage monthly returns as they enjoy most of the growth in their short time span. If your intentions were to wait for initial high growth after EOL and sell now then obviously waiting later looks to have proven most beneficial. However, the longer you intend to hold the set the difference between the monthly growth rates start to even up.

For example if your plan is to hold the set for another 2 years lets see what the results after that time are. You need to make an estimate of the expected growth over those 2 years. The following table shows the monthly growth rates for each of the 3 interesting purchase points given a few different annual growth rated for the next 2 years.

You can see that as the growth rate gets higher the later purchase points have a better monthly increase. The 30% mark is about where they break even. I feel that the 25% level is realistic and slightly on the side of conservatism. After those 2 years of 25% growth per year the set should be worth $554.20. Buying the set back in Dec-11 at it’s biggest discount looks to have the slight advantage there.

The other thing you can do to compare two different purchase points is to look at the growth rates between just those two points and see how impressive that might be. Lets take the difference between Dec-11 and Jun-12. Buying for $181.99 in Dec-11 saves $35 compared to buying for $217 in Jun-12. That savings represents a 19.24% return in those 6 months, or 2.98% CMGR for comparison. The question we need to answers is could you have invested your capital into something else in that time period that would give you more than 3% growth per month?

There would have been a few sets that could have bettered that during those 6 months. For example Taj Mahal was growing an average of 8% per month during that time. Still, 3% per month is very impressive and you should be pretty pleased with it, suggesting that the Dec-11 low point was a very good purchase point.

Likewise, comparing to the opportunity of purchasing at the end of retail in Dec-12 the $78% savings back in Dec-11 represents a 12 month growth of 42.86% or 3.02% CMGR. That is also very good and you won’t find too many set options giving that sort of performance. There will be a few for sure, but picking them would have been hard at the time.

Conclusions

It’s far harder to optimise your purchase decision at the time you are presented with a discount opportunity. You don’t have a crystal ball so are unlikely to be able to know whether a discount will be available in the future. It’s also hard to predict EOL times, you can estimate, or make an educated guess based on the cumulative shared wisdom of members here on Brickpicker, but often it’s not an exact science. It’s far easier to try and look at the optimal purchase point looking backwards with the full benefit of hindsight and complete information.

I’m not sure this article will have helped you a great deal, but I feel like I’ve at least got my thoughts down on paper. I think this is a topic I’d like to return to in the future as I feel I haven’t quite captured a way to determine when the best point to buy was. It’s going to require a bit more research. At the very least we’ve been able to see that buying time does have a big impact on percentage returns on investment in the shorter term. And that the opportunity cost of buying early is the potential profits that capital could have been used to generate on a different set.

"ED"itor's Note: This informative and well written article was a collaboration of Quacs and Fcbarcelona101...

In 2006, a television show debuted in the US called Man vs. Wild. Originally a British show called Born Survivor, Man vs. Wild was a reality TV series hosted by the noted outdoorsman and stuntman Bear Grylls that chronicled his efforts to thrive in remote locations by demonstrating and using various survival skills. Throughout each episode, Grylls used every piece of information and natural resource the local landscape offered him, and provided the audience with some audacious survival techniques. Needless to say, it made for some compelling television.

Gryll’s locales provided him incredible opportunities to showcase his atypical survival techniques, and every landscape he visited was full of tools to survive. In our "reality game" of Lego investing, new Brickpicker members are faced with a similar challenge. Tools to learn and conquer Lego investing (or more colloquially, Brickpicking) abound, yet they too can be hidden in plain sight. Members' unfamiliarity with Lego investing may obscure the powerful tools that are readily available, or their inexperience may contribute to a lack of awareness of these tools. With this article, we intend to provide both new and veteran Brickpickers with a road map to our favorite site. So, strap on your waterskin and get ready to make your way through Brickpicker and all of its functions. With a little bit of guidance, its vast information can provide all of us with immense opportunity.

The first rule of Brickpicking is to make money, and in order to make money in Lego investing, you must learn how to build a portfolio. Portfolio construction is the vehicle that Lego investors use to make money. Broadly, portfolio construction includes the following steps:

• Building Your Portfolio
• Tracking Your Portfolio
• Refining Your Portfolio
• Selling Your Portfolio

While this sounds simple, learning to master this cycle will make you money in the Brickpicking game. Naturally, Brickpicker has evolved to include several modules that provide information to help conquer each of these steps. The site also includes a few additional modules that provide a break from the work of Lego investing. To unlock Brickpicker’s potential, let’s go step by step to discover the tools at our disposal to become a dominant Brickpicker.

Build your portfolio

So, you have made the decision to begin your journey as a LEGO investor. The most important question you will ask yourself is, "where do I start?". Thankfully, Brickpicker has several different features that can make that always difficult first step a little easier, but before we review them there are a few points that any investor should keep in mind:

• As with any investment, diversification is key. When investing in LEGO, a good way to diversify your portfolio includes purchasing sets from multiple themes and different sizes/price points. Don't discount the small sets due to their small returns - a good mix of well selected smaller sets can reduce the overall risk of your investment.
• Consider all the costs of LEGO investing. Take into account all of the hidden costs associated with Brickpicking such as wear and tear on your vehicle, insurance and storage. These will be important when determining the actual ROI of your portfolio.
• Craft your investment strategy before hand. It is extremely important that investors establish a clear set of rules to govern your LEGO investment selections. It is very easy to buy every set that sees a discount, but this is not the most efficient way to achieve good returns in the long run.
• Do your research. This goes along with choosing an investment strategy. It is extremely iportfolio.mportant that investors analyze prospective investments as much as possible before actually putting hard earned money into them. You would not invest in a company you have never heard about just because it is 10% cheaper than yesterday; Lego sets are no different.
• Invest within your means. Don't exceed your budget just because some other investors are purchasing several copies of a set and telling you how well they will perform. Follow your strategy and don't get caught up in the hype.

These points mentioned above are not the only ones you should pay attention to while starting investing in LEGO sets, but they are the most basic ones everyone should consider before jumping into Lego investing. With these in mind, let's take a look at the most important features Brickpicker offers its members when starting a LEGO portfolio.

Sales and Discounts
One of the oft-repeated mantras you will see in the forum is, "Never to pay retail for your LEGO sets". This is pretty basic advice and while an investor must consider several variables when deciding whether to purchase a set at MSRP, getting a set at a discount is your best bet to maximize future investment returns. A nice article that goes a little more into detail about the effect of discounts on your ROI can be read at Grolim's Blog.

The premise is pretty straightforward: by getting a set at a discounted price you will stand a better chance at making money even if the set ends up being an investment loser. It is pretty rare when a LEGO goes for a lot more under retail even when its investment performance is below average, so getting a discounted set will make a huge difference when it comes time to sell. Because of this, Brickpicker's Sales & Discounts module gives investors a lot of good information about currently discounted sets in the market. Once you click on the Module, several different features will drop down. Let's evaluate each one a little closer:

Amazon / Walmart / Target Discounts: These three individual modules consist of information related to the current discounts offered by each retailer. In some instances, especially with Amazon, you will be able to select the country you are interested in checking, and the list will include valuable information like the current price of the set, the current percentage discount, the MSRP, and the date and time of the last update. Please note the page will also warn you if the list price from the retailer is higher than LEGO's MSRP, a handy tool that could keep you from purchasing a set you believe has a great discount, but in actuality, doesn't.

The discount page also presents you with a Buy it Now button that will take you to the retailer's website and give the site some credit at the time of purchase. That is a free and good way to help Brickpicker!

Amazon Price Grid: This page is very similar to the discounts section we examined above, yet it does provide a more convenient place to compare Amazon discounts across different regions and a tool to sort the results in several ways. For example, if you are interested in checking only those discounts related to sets in the Architecture theme, clicking on the Quick Link will bring you to a page that shows you only those sets.

Furthermore, you can choose the lowest level of discount you want to be shown with the sorting tool in the upper right corner. If you only want to check the sets with a discount equal or greater than 20%, you can select that option and the page will show you a complete list of sets that meet that criteria. This can be very useful if you have a particular discount level that usually makes you "pull the trigger' with some LEGO sets.

Amazon Best Sellers and Top Selling Sets: These two individual modules are similar, but include information based on two different retail outlets: Amazon and eBay.

The Amazon Best Sellers page will give you the Top 100 best selling LEGO sets and products on the online retailer's site along with the current discount of each listed set, if applicable. This particular list is updated fairly frequently and you may notice that a set that used to be in position 80 in the morning might not be there by the time the night comes around. Those movements are just regular fluctuations of Amazon's sales, and most of the time the list is pretty consistent with whatever is popular at the moment.

As with the Amazon Discounts page, you will be able to select different regions to see what is popular in different locales. This is very useful not for those that do not live in the US, and for US sellers trying to determine unpopular domestic products that may flipped based on their popularity abroad.

This module also has a Top Selling Sets tab that is basically the same as the previous list, yet based on data taken from eBay. Unlike the Amazon page, this one is updated once a month with the same data that feeds the Brickpicker Price Guide (more on that later) and includes some other interesting data for you to make the best decision portfolio selections possible. For example, you will notice the page lets you know where a particular set placed on the Best Seller list during the previous 5 months. This information is critical to determining prevailing trends in the LEGO market.

As an example, say you are considering purchasing a somewhat expensive LEGO set for investment purposes and check the list to see what has been selling on eBay. If you check the list now, you will notice that the 10227 UCS B-Wing is currently in the top position. If the information from the previous months were not present, an investor may think that the ship is a great and popular choice. Yet, a quick look at previous month data would show the set placed in the high hundreds over the preceding months. A savvy investor would easily deduce there was an anomaly in the market that boosted the popularity of the set. In this instance, it was the controversial May the 4th Sale.

You can also filter the results by theme and see which set is the most popular on any given line, as well as its overall place in the Top Selling list.

Top Retired Sets: The last feature of the Sales & Discounts module is the one with the highest potential to be incorrectly overlooked. Even if most investors follow a strategy of investing in current sets, there is significant upside in finding retired sets that are still experiencing periods of high growth or what Grolim called a "Second Wind". Quite often, we see long retired sets growing rapidly in value after a period of somewhat stable pricing. Some sets never slow down and continue to grow rapidly for years (think 10179 and Taj Mahal). For those interested in diversifying their strategies and portfolio finding these sets can be a very rewarding decision.

One of the main advantages of using this strategy is that already retired sets grow from the moment you decide to purchase them if you pick the right sets - there's no wait ing for a future EOL date. For this strategy, the Top Retired Sets feature is very useful. This page shows you the top performing retired sets (released 2008 or before) over the past 6 months, and gives you their ROI. Additionally, it presents you with some eBay listings that are priced within a 20% range of the current market value. Looking for well performing retired sets is easy with using this list and the BrickIndex, a module we will discuss later.

Some other cool statistics shown on this page include the traditional set information, like PPP and MSRP, as well as some investment numbers used a lot in this site such as CAGR and monthly price movements.

These are the features of the Sales & Discounts module in a nutshell. As you can see, there are several features that will help you build your portfolio, and will prove invaluable once you get more experience and have a more polished investment strategy.

Tools and Data

Even though discounts are a very important part of the portfolio building process, they are certainly not the only thing to consider. The Tools & Data module presents the LEGO investor with several other features that will allow the decision making process to be based on data analysis rather than personal intuition or conventional wisdom. While it is very important to pay attention to the impressions of the community, a well-informed decision will always be supported with hard, quantifiable data. Let's look at a module that allows this: The Tools & Data Module. Compare Sets: Financiers compare prospective investment opportunities and historical performance of past investments routinely. When it comes to LEGO, comparing sets is equally important and will help the investor in several different ways:

• Evaluate the similarities and difference among a number of individual sets when it comes to metrics like PPP, MSRP, piece count, release date. This very basic information allows an investor to determine whether the value for the money of a particular set is consistent with several others.
• Compare the performance of already retired sets. It is this case where most of the information displayed in the pages comes into play. Input the set number or name and a list will drop down with those that match what you are looking for. Click your preferred sets and you will see a screen similar to the one below that will include each set's CAGR (Compounded Annual Growth Rate), last six months performance graphs, current market value and percentage changes relative to several different periods of time both for New and Used sets. All of this information can help an investor determine which sets have performed better than average or at least better than the sample of sets selected, as well as help in the search for retired sets experiencing high growth.
• Compare a prospective investment to what you think have been comparable sets that LEGO has already retired. By doing this, you will be able to make an educated guess about a set's potential investment ROI based on the similarities of the comparables. Characteristics like theme, piece count, minifigures and other factors will determine which sets you will choose to compare.

The Brickpicker Compare Sets function will allow you to select up to 6 sets, and the process is very simple and fast. Just input the set number or name and a list will drop down with those that match what you are looking for, select your desired sets to compare, and you will see a screen similar to the one below.

The BrickIndex

The BrickIndex is easily one of the best features offered by the site. This chart is updated once a month in the regular data update and displays the top performing sets over the last 6 month period. Unlike the Top Retired sets list, the BrickIndex can include sets that are not necessarily retired but have showcased high growth over the past half year, as evidenced by the current presence of sets like Tower Bridge and the VW Camper Van.

This features plays a major role when trying to determine which sets are the best to select for your portfolio as they will likely be recent, and probably future, high growth sets. For example, you will see that the UCS AT-ST set is currently in the 5th position of the BrickIndex, with an increase of around 68% over the last six months. From this information an investor could make a reasonable prediction that, even if the set has been retired for a while now, there is further growth to take advantage of given the recent trends. That said, the BrickIndex is almost always comprised of already retired sets, as by default these are the ones that usually present higher growth.

Like several other features in the site, you are able to sort the results by theme to view only those sets that are part of a line you are interested in analyzing.

Bulk LEGO Data

Sealed and used sets get most of the attention in LEGO investing due to their proven investment performance, and because of their visual appeal. However, there is another branch of investing that can't be overlooked as it is also a good source of returns for many: buying and selling LEGO in bulk.

I would strongly suggest a beginner LEGO investor to look into this alternative as a way to diversify their investment portfolio because bulk lots are relatively easy to find locally through sites like Craigslist, garage and estate sales and through the more traditional eBay listing. The appeal of buying LEGO in bulk is twofold: LEGO pieces are always in demand from MOCers and LEGO enthusiasts, and bulk lots are fairly easy to market, sell and ship; and there is always the chance that a bulk lot contains rare pieces or minifigures that can earn the investor a great return in the short term.

Since bulk lots are more for quick flipping than a traditional buy and hold, it is critical that investors knows exactly how much can a lot be sold for on sites like eBay before going ahead and paying a bunch of money for 2 lbs of common pieces that may net you a loss. The Bulk Data center of Brickpicker provides investors with the tools to find out what bulk sets are selling for on eBay based on weight.

The information on this page is shown differently to what is found the set Price Guide since sellers list bulk lots with completely different titles. The most efficient way to present this data is to have the exact listing title along with the sold price, so that is how Brickpicker's Bulk Lot tool is structured. In the listing title, the weight of the lot is listed almost all the time, so by checking the list the investor will be able to make a fairly accurate estimate of the value per pound of a particular lot.

Some other interesting features in this section include selecting the minimum weight of the lots you want to see, themes included in the lot, and colors. Keep in mind that these features rely on how well the seller listed the lot and what specific keywords were used.

CAGR by theme

CAGR by theme is the last feature available from the Tools and Data module, and it can be extremely helpful to any new or veteran Lego investor. The data from this list includes the simple average of the CAGR of all of the sets included in a particular theme, giving you an average CAGR by theme that can work as both a popularity proxy and a performance measure at the same time.

For example, the top performing theme according to the CAGR by theme list is Ninjago (44.78%), something that an investor could take as evidence that the theme's popularity is rather high and that at least several sets have presented great performance upon retirement. These high measures are especially significant when one considers this average includes the CAGR of sets that are still in production, typically much lower due to currently available discounting.

As you can see, you can use this feature to find themes that have performed well in order to reduce some of your portfolio risk. That said, it is still very important to analyze the numbers more in depth by reviewing the individual sets of the theme before making a decision. The simple average provided includes the CAGR of small sets and polybags that can double or triple in value fairly easily, and they are all weighted the same as larger sets. For those of you that prefer investing in larger sets, a weighted CAGR is a nice alternative.

Track your portfolio

So, you've done your homework, selected and purchased a cadre of diverse sets based on your own investment strategy. Now, you must follow them closely and track their performance like a stock or bond trader. Fortunately for members, Brickpicker provides investors with an incredible tool to accomplish this: the Brickfolio.

Brickfolio

The Brickfolio is the place where all the information about your investment sets can be compiled and tracked. Because it's critical for every investor to know how efficiently they are investing, the Brickfolio puts the most valuable information all in one place to minimize the time it takes to research and evaluate your current portfolio.

The Brickfolio module has many interesting features, so let's evaluate the most important ones:

My Brickfolio: This section is where the bulk of the information is shown, and where you will be spending most of your time analyzing your portfolio's performance. The first thing you will probably notice are the overall numbers that relate to your investment such as total current market value, the monthly dollar and percentage change, and more generic information like the total amount of sets and total number of pieces. Futher, the market value of your Brickfolio over the past 12 months is presented in graph form to allow for easier and faster performance tracking and evaluation.

Further down the same page you will notice three different graphs. The first pie chart provides a breakdown of the value of your portfolio by theme, something that can quickly help you determine the makeup of the portfolio. For example, if half of your portfolio holdings are sets from the Friends theme, it would be rational for you to pay a closer look at the market demand for those sets, new releases and pretty much every other type of news relating to that theme to forecast any changes in value. This does not mean you should not pay attention to those themes that comprise a small part of your portfolio, but at least you get an idea of where you should be focusing most of your time.

Also, this graph will give you a pretty nice view of how diversified you are , and how closely you are following your capital allocation strategy. If your strategy includes holding 50% of your portfolio in Star Wars sets, this graph will be a great tool to assess whether there is any need to re-balance the portfolio.

The middle graph shows you how many sets you have in each theme without taking into account the current market value: think of it as counting the number of "shares" you have on a particular theme. Finally, the last graph will give you a breakdown of how well the overall themes you own have performed relative to the prior month. This is a great way to determine underperforming sets and allows you to evaluate your portfolio a little more deeper. For example, if you use this graph to find the sets you own in the Star Wars theme have cratered, you will have to determine why exactly this happened. It's possible you are either not picking the right sets OR not having a lot of currently available sets.

To the right of the graphs shown above you will find some other bits of interesting information about your current holdings as well as some options to customize your Brickfolio according to your region. There is also a button where you can click to see your entire collection of sets currently entered in your Brickfolio, the option to change your base currency, and an option to share your Brickfolio with other users. There is also some detailed information about your most valuable sets (new and used), and some minor supplemental statistics. Finally, the Brickfolio provides a breakdown of sets by Used or New including the market value by condition.

View Brickfolio Items: This option takes you to the same page as the View Collection button in the screen above. Basically, Brickpicker shows your collection by theme with the quantity of sets in each one, and some options like adding sets to the Brickfolio (even custom sets), searching a specific set in your collection (very useful if you have a large inventory), and viewing your entire portfolio to provide a more detailed display of every single set you currently own. This last one is the most interesting of all, so here's a screenshot to demonstrate its featues and look:

After clicking the View Entire Collection button, you wil be sent to a page with all of the individual sets in your Brickfolio, along with some very useful data. Most importantly, you will be able to see your purchase price, the current market value and the performance measures for each set (including ROI), and actual dollar profit. This is the best place to analyze your individual holdings and routinely track their performance (I would recommend monthly, if not more). You will also see the total price paid for all of the items in your Brickfolio and the total current market value of your holdings at the end of the table.

Add Brickfolio Item: So far, we have discussed how to track your investments in detail, yet we have not mentioned how to enter your sets in your Brickfolio. Accomplishing this is straightforward: just click on the Add Brickfolio Item link to enter a vast amount of information about your sets such as purchase price, date, place of purchase and set condition. This information will make tracking your inventory a lot easier and less time consuming. Even if this seems unnecessary at the beginning, once your inventory continues to grow you will need to add as much detail as possible. There is also a text field where you can add any other notes you may want to keep in mind when selling or just as reminders.

Data Services: This section really consists of two very important features: the "Clear your Brickfolio" and "Export your Brickfolio". The first of the two does exactly what it advertises, it clears your complete collection without the possibility to recover any of the data, so you should only do this only if you are certain you have no need for this data.

The export feature will automatically generate an Excel spreadsheet that will contain all of the information shown in the online Brickfolio. Exporting this information to Excel will allow you to manipulate data in the Brickfolio. This will allow you to perform several different tasks, including tracking inventory and recording current Brickfolio values for insurance purposes. I would recommend updating your spreadsheet at least once a week if you are very active both buying and selling, since keeping accurate and up to date records is crucial to tracking your performance.

As of the date of this article, there is currently no option to track actual sales, so you need to delete those sets you sell in order for them to be removed. To maintain a record of sold sets while eliminating its purchase information, edit the quantity and price of your sold items to "0". Future Brickfolio updates may include a feature to record your sales, yet nothing has been confirmed.

Here is a screenshot of an Excel spreadsheet generated automatically from your Brickfolio page: Promote Brickpicker:

The last feature of the Brickfolio module allows you to create a personalized signature with preselected data from your personal Brickfolio. I would wager that members have already noticed some posts with these around badges in forum posts, but in case you missed them, I included a picture a little further down. The goal of this is not only to share some of your holdings with other members, but also promote the site on other websites, forums and blogs. When creating your own signature, there is a check box that will allow you to maintain the actual value of your Brickfolio private while still showing some of the more generic information.

Refining Your Portfolio

Now that you’ve built a portfolio, and are intently track its inventory and value, effectively refining your portfolio will move your portfolio's ROI from good to great and allow you to meet or exceed your projected ROIs. What does “refining your portfolio” mean? It means constantly reviewing the selections and purchases you’ve made in the context of their value in the market. As we all know, information changes by the minute in today’s day and age, so to ensure you’re capturing the most value for your portfolio, it’s critical for BP members to be up to date on the most current market trends and information. Brickpicker provides five modules to aid in keeping you on information’s leading edge:

• The Lego News module
• The Evaluation Corner articles
• The Brickvesting Blog articles
• Lego Set Reviews
• The Discussion Forum

As an example of how important and quickly Lego news can affect the market, most BP members remember the 9516 Jabba’s Palace controversy in April. A news story about how JP would be discontinued hit the Lego News module, Brickpickers reacted to it in the forum, and many profited by quickly buying and selling Jabba’s Palace at a profit to speculators that were whipped into a frenzy about an erroneous EOL report. Throughout the controversy, most of the chatter in the forum thread dedicated to JP was calm and rational. Many BP members speculated that 9516 wouldn’t be retired and even if it was, directed others to current discounts on the set to ensure all members were prepared for an EOL in case it did come. When all was said, Brickpickers were more prepared than the general market to profit from this market fluctuation, and many did in spades. With that as a backdrop, let’s review each of the modules available to refine our portfolio:

The Lego News Module

Located near the bottom of the front page, The Lego News Module is a wealth of Lego-specific information from outlets across the internet. While it appears to be a typically updating news feed, it has helped me on more than one occasion stay well versed on planned Lego releases, and industry information from a number of great Lego fan sites, as well as some national outlets with Lego-related news articles. It updates quite frequently, so chances are you will not see the same stories twice. The Lego News Module is an underrated feature, and since it only takes a quick glance to get the latest Lego information, this News Feed should be added to your daily reading rotation.

Evaluation Corner

Smack dab in the middle of the Brickpicker’s home page is the first of two user blogs that provide a vast amount of information and analysis: Evaluation Corner. In Evaluation Corner, members post in-depth analyses of Lego themes that include discussion of individual sets of a particular theme and their investment potential. The Evaluation Corner grew out of the original Set Review Module, and has become a fantastic repository of investment analysis and advice of each theme. The following recent themes are represented with analysis in the Evaluation Corner area:

Star Wars (Fall Lineup)
City Airport
Winter Village
Technic
Playable UCS Equivalents
SpongeBob SquarePants
The Hobbit
Galaxy Squad
Maersk
Lord of the Rings
Architecture
The Lone Ranger
Western
Modulars
City Fire and Police
Transportation
Super Heroes
Legends of Chima

This list is only a fraction of the Evaluation Articles that have been written, and as you can see, it encompasses some of the most popular recent themes. Rest assured, the founders read each Evaluation Corner entry and respond to the author’s analysis to provide a second opinion, while members are given the opportunity to scrutinize the article in the entries below. Everyone has a chance to weigh in on the applicability of the advice, so be sure to read these response comments carefully, too. The Evaluation Corner, above all else, helps with assessing the sets with the most investment potential in a particular theme.

Brickvesting Blog Brickpicker’s Brickvesting Blog Module has provided the site with the most cutting edge and relevant Lego investing market analysis, beginner’s guides, and investing advice on the market today in one convenient location. While the topics for these articles are as varied as they are informative, they are all well written and packed full of information, advice and in some cases, contradictory opinions. If you need some information on a particular investing strategy, would like help with eBay, or wonder how to pick the right sets for your portfolio, there are many articles from veteran BP scribes with information to help both new and old Brickpickers alike. Similar to the Evaluation Corner, the Brickvesting Blog has a response comment section for every member to assess the content of the article and challenge their notions and analyses. The site content has really exploded over the last three months, and the Brickvesting Blog has greatly benefited. Be sure to read and scrutinize all applicable articles to build your own portfolio.

Set Reviews
With over 1,000 reviews on file, the Lego Set Review Module is yet another source of information and advice for a Brickpicker looking to refine their portfolio. The majority of these reviews are in a structured format to give BP members the opportunity to understand the details, value and playability of the set in addition to its potential return. The format structure really makes the Review Module a strong tool since it forces the reviewer to provide insight beyond the useless “this set is awesome” meme. Additionally, while the Review Module has its own navigation tab at the top of each screen, the set reviews are also embedded in their respective entries in the Lego Price Guide for easy access. The reviews give very specific information by set, so they go a little deeper than the Evaluation Corner articles. Use this module to learn as much as you can about the set, but beware that many of the reviews are written by fans of the set or theme, so investment potential may be slightly biased.

Discussion Forum

Easily the most dynamic module of the Brickpicker site is the Discussion Forum, the place where all Brickpickers go to discuss Lego investing, collecting, news and stuff in general. The forum is typically a collegial place, so you will find most members quite accommodating to new members.

There are some important rules about the forum to understand and follow:

• Solicitation of any kind is not allowed. Don’t post advertisements or sales you are trying to unload, and don’t solicit members for deals, business ventures or partnerships on the forum.
• Political discussions are not allowed. The site is not a forum for members to discuss politics.
• Crude language is not allowed
• Name calling is against the forum rules
• Spamming is not allowed.

In addition to these written rules, there are some unwritten rules that members generally follow that make the forum a great place to cyber-chillax:

• Be respectful. Members of all ages, nationalities and creeds enjoy Lego, and they all have different perspectives. Sharing your thoughts and opinions respectfully makes for a better forum.
• Because the forum is a dynamic place, there is an entire archive of topics that have been discussed. Before posting a new thread, check the old threads for a similar topic. There’s even a function to help with this if you’ve clicked the “New Thread” button. After typing your preferred title, the site will bring up a number of similar threads that may be a good place to post your thought. Review these, and if any are close, click on that topic and a new post will be started in this thread.
• Brickpicker is an international website that welcomes Lego fans from everywhere around the globe, and English is a second language to many who post on the forum. Please don’t pick apart someone’s grammar mistakes - everyone makes them!

To help with quick access, the Discussion Forum is organized into five main areas:

• The General Board – This board has the broadest group of threads, and is the “catch-all” for most non-investing threads. The four sub-forums in the General Board are New Member Introductions and FAQs (a great resource for newbies), Site Information and Updates (a great resource for veterans to suggest and check on changes to the site), Odds & Ends, and Building Lego. The last two include many topics that are not related to Lego investing.
• Members Only Forum – This board is not available to non-member lurkers, so Brickpickers that share good deal, pre-release information, and every-so-often an insider nugget will post their information here.
• Investing and Collecting – This board has the most topics of all, and they are generally grouped by theme. If you have a question or need some insight on Technic, there’s a theme dedicated to discussing it. There’s also a sub-forum discussing the always controversial retirement (EOL) topic, but keep in mind no one REALLY knows whether something is retired until TLC confirms it!
• Buying and Selling – Another with many topics, the Buying and Selling board has sub forums and threads that are centered around specific Lego distribution channels, i.e. eBay, Amazon, Toys R Us, etc. Buying and selling practices and information regarding clearances specific to these retailers can be found among these threads.
• Local Area Lego Deals – The most recent board to be created, The Local Area Lego Deals includes topics centered around specific locations around the world. Live in Chicago and want to discuss your thoughts about the marketplace? This is the place to share.

There are other neat little features of the Discussion Forum that are used frequently that make it a vibrant platform to discuss Lego:

• Reputation Points – Brickpickers have the option to give a poster some credit for a particularly useful or cogent post. In the bottom right corner of each post, there is a small green arrow – clicking on this will give the poster a “reputation point”. These reputation points give newer members an idea of which posters contribute strong and relevant content. Anyone can see the reputation points of any member by clicking on that poster’s avatar.
• Following a thread or forum – Members have the option to check a box in the upper left hand corner that allows them to “follow” a specific thread or forum. When following a thread or forum, the website will automatically send out e-mails with new posts from the followed thread or forum.
• Brickpoints – The Site Founders, Ed and Jeff Mack, have instituted a promotional system where participating in the site can earn you Brickpoints that can later be redeemed for Lego sets. To the left of each post, the poster’s information is displayed including their avatar, country, post count, Brickpicker classification (Brickpicker, Brick Troller, etc.), and their Brickpoint total.

The Discussion Forum is the best place to get immediate feedback and reaction to any Lego-related thoughts or questions you may have. We look forward to both your questions and answers!

Selling Your Portfolio

So, you’ve built your portfolio, tracked it, refined it and now you’re ready to start raking in the big money! Is it time to sell that 10214 Tower Bridge, or should we wait another year? How about that Jor-El polybag you got last month for free from Lego S@H? While you have the option to ask for opinions in the forum, this is your money on the line and any serious investor wants to sell for their target ROI. How can an investor make an informed decision on when and how much to sell for?

Fortunately for members, the core module of Brickpicker is the Lego Price Guide. The price guide includes individual information on over 9,000 Lego sets. Because there is so much information in each set’s price guide entry, we must separate these entries into their component parts to understand and absorb all of it. Here is the list of the parts of each set’s Lego Price Guide entry:

• Pricing information by region
• Photo Gallery/Set information
• Current Offers
• Monthly Listings – Quantity Sold
• Monthly Listings – Price Sold
• Price and Performance Information
• Set Ratings and Member Reviews
• EBay Listings

That’s a lot of information to digest, so let’s review the features included one-by-one:

Pricing Information by Region Pricing

Information by Region includes data that’s truly valuable and sets Brickpicker apart from other Lego sites. It utilizes an eBay data capture program called TerraPeak that tracks sales of all Lego sets, bulk lots and minifigures on eBay. Brickpicker utilizes this data to produce an average value for every set that sells on eBay. To produce the pricing, the last 30 sales are used to produce an average selling price by region. In the past, Brickpicker’s Lego Price Guide only tracked sales made on eBay US, but recently eBay sales from three new regions were added to the Price Guide: Great Britain, Germany and Australia. These sales are aggregated by Brickpicker into four, region-specific sales averages to give members are clear, concise average value of any Lego set among all four regions. Not only is this incredible information, it can present an enterprising Brickipicker with opportunities to sell across country lines.

As you can see in the picture above, the Pricing Information by Region table is split into various columns of information. The Market Value (New) and Market Value (Used) are estimated prices for new and used sets respectively, the Last Month (New and Last Month (Used) are the price increase or decrease for each from the previous month, the CAGR prices measures the Compounded Annual Growth rate from a set’s release year (not its retirement year), and the Price Per Brick columns divides the average new and used prices, and the retail price by the number of bricks that come in the set to give an estimated value to compare sets across time and other themes. All of this information paints a great picture of what the relative price is for an individual set.

Photo Gallery/Set Information

This module may appear diminutive, but it packs a punch. Here, you can look up the primary statistics of every set, including piece count, minifigure count, release year, retail price in all four regions, and links to this set’s page on Rebrickable.com, Bricker.com and even online instructions for the model! It even has a separate section to show how many of these sets are in your own Brickfolio, another great little feature that goes largely unnoticed. The links to Rebrickable.com and Bricker.com are also useful in their own right as they provide further specifics into the inventory and parts list for each set, as well as other set features. Finally, this module includes another underrated feature – a photo gallery that shows images of the set. While it doesn’t sound like much, having a visual image of the set or box allows the viewer to quickly check this is the set they want to review.

Current Offers

While not glamorous, this bit of information tells Brickpickers what price point online retailers have set for this model. It easily and quickly provides a snapshot of your competition’s price when determining your own price. It also provides a pass-through link to the online retailer that sends Brickpicker a small commission on that sale that helps pay for the information the Site Owners provide for free.

Monthly Listings – Quantity/Monthly Listings – Price

The two Monthly Listings sections are also powerful tools. Essentially, they are graphs that track the quantity sold and the average price sold of new sets and used sets over the last twelve months. Remember the 9516 Jabba’s Palace controversy, or the B-Wing discounting? Graphs for both of these sets show the relative spikes in sales quantity and price during their respective market disruptions, and provide an investor with a picture of how the sets sold before and after their respective fluctuations.

Pricing and Performance Information

This is another module with incredible detailed information aggregated into useful statistics. There are four tabs across the top of the table that contain different information:

• Performance Over Time – This shows the set’s current appreciation/depreciation over the past month, 6 months, 1 year and 2 year time periods. It also includes how much the set has appreciated over retail, providing a de facto measure of ROI.
• Recent Sold Listings – This gives Brickpickers the specific sales that TerraPeak uses to calculate its average sales price for the set. This is a great table that provides individual sales quickly. The date and “New” or “Used” designation are also provided. For new members, I highly recommend scrutinizing this list, along with eBay’s and/or Bricklink’s current sold data, to determine a sales price for your listing.
• Averages – More data that provides statistical measures of the TerraPeak data by region. Mean, Median, Mode, Max and Min Price statistics are all included, as well as the quantity of sales that goes into determining each average price.
• Live Completed Listings – This section provides a link to eBay’s live completed listings for the set. This is also invaluable to determining a fair sales price for your sets.

All of this data will provide a pattern of sold prices that should help to determine what your sets’ sales price should be. Keep in mind that these are not absolute, so if you want quicker sales, you can price your sets lower than market value. If you want a higher price for your sets over this rough estimate of market value, you can see the upper limits of other sales prices.

Set Ratings and Member Reviews

This module shows reviews of the set that have been completed by Brickpicker members, and the average overall score for the set. There are links to specific reviews here, as well as arrow keys that toggle between other older reviews. This information is good to gauge a “general consensus” of the quality and potential EOL value for the set. These opinions should help with timing decisions and pricing decisions for your sets’ sales.

EBay Listings
This module is nothing more than its title: a list of active eBay listings for the set. Yet, it still provides members with loads of information. First, if your set has already been listed, you can view your competition to see whether you have a good chance at a sale. Second, if your set hasn’t been listed, you can see where your actual competition has set their prices. Finally, you can see how many listings you will be competing against for a sale to determine whether this will likely sell quickly or slowly.

There are a couple limitations of the Price Guide to note. First, the prices are generally updated on the 15^th of every month for the previous month’s sales, so this average value is not a real-time price. Second, eBay sales prices are only as good as the sales’ corresponding listings, so if an eBay seller lists a set as “New” but titles the listing “without Minifigures”, this listing is still captured by the Lego Price Guide data as a “New” set. This can sometimes under report the actual value of a new set. A quick review of the sold listings will net individual sold listings of the average value, and it’s usually easy to tell the average listing and an outlier that may not be an actual NISB sale.

Ultimately, all of the information in the Lego Price Guide exists to help you determine market value for a set. Once you know market value, you can determine whether your set will garner your targeted return parameters. If you believe you can meet your sales targets, it’s time to sell! Proper research and use of the Lego Price Guide will make you an informed and intelligent seller, and allow you to see your portfolio’s expected returns converted to actual returns. What you do with all that profit is up to you!

Have Fun and Share!

So far, all we have discussed has dealt with how to use Brickpicker effectively for LEGO investing, but that's not to say Brickpicker members are about all work and no play. In fact, there are several features that are designed to provide members with a break from the "stress" and "work" of deal hunting and selling LEGO sets (even though most investors don't consider this an actual job). Let's take a look at some of the most important ways you can relax a little and share things with some of the other members.

Personal Blogs

We have already talked about this great feature earlier in this article, but it is important to point out that personal blogs are not limited to investment related articles. Of course, Brickpicker caters to investors, but the personal blog section gives any member the freedom and a space to share pretty much anything LEGO related. Do you have a fun story about how you got started into LEGO or about your MOC creations? These are completely valid topics to discuss in your personal blog!

Gallery

Brickpicker members have access to a gallery feature they can use to upload images and charts for articles or reviews, or to post pictures of MOCs and personal displays. There is really no limit to what you can share with other members in pictorial form, and we can all agree that sometimes a picture tells more than you could ever describe in a forum post. You can even comment about other member's images and share your impressions!

Image Hosting

Brickpicker's image hosting module is a very useful feature that was just recently added. For those of you that have used sites like Photobucket already know what I am talking about, but for those that don't, image hosting sites allow you to upload images from your personal computer or device and store them in the cloud while providing you a link that will make your images visible and easy to share. By copying the link, you will be able to insert the picture pretty much everywhere, from posts to blogs for all to see.

Awards

When posting in the forums, there are several "actions" or milestones that will earn you one of the many awards available to members of the site. Things as simple as posting a certain amount of posts or focusing on some particular feature of the forums can net you a badge that will show under your avatar. The following are just some of the awards currently available to members, but the list may include some extra in the future.

Brickpoints and Brickpoints Store

As mentioned previoulsy, the Brickpoints system is sort of a rewards program for those members who decide to become active participants on the site. There are several ways to earn BPs, going from regular posting to submitting Evaluation Corner or Brickvesting Blog articles that get published. For a list of detailed ways to earn points please visit the following link to the Brickpoints Program.

Once you have earned your BPs, there are many ways to use them right here on the site. Think of them as some sort of e-currency that allows you to "purchase" sets at the Brickpoints Store, getting them in exchange for your regular participation. They will also be used to reduce listing costs once the Brick Classifieds platform goes live (TBD). Let me emphasize this again: BRICKPOINTS ARE FREE, so make sure you participate in the site and get rewarded in the process!

Just to give you a taste of what you can earn with your Brickpoints, I included a screenshot of the BP Store below.

As you can see, there are several different ways to enjoy the site even when you feel overwhelmed by all the investment talk. It is therapeutic to take a break and enjoy talking about LEGO with other fans from around the world, and special forums like Odds & Ends, Building LEGO and the features described below are there precisely designed to help with that. We really hope you try them all and pick those that are the most interesting and fun.

If you've lasted this far, you have officially survived Brickpicker's version of Man vs. Wild. As you can see, the size and scope of the website is enormous and tackling it can be daunting. Hopefully this guide has both provided you with the road map to navigate the site, and placed you solidly on the road to making money investing in Lego! Enjoy your time discovering and exploring the site, and don't hesitate to use this as a reference. By and large, Brickpicker exists to help its members make money, and we hope you are successful with your Lego Investing adventure.

- FCBarcelona101
- Quacs

Ed and I would like to give a special Thank You to both Quacs and Fbarcelona101 for putting together this extraordinary user guide to the Brickpicker site.  It is something that is long overdue and these guys did a fantastic job.  Much better than I personally could ever do.  We can't thankyou enough! Bravo!!

The differences in retail prices that Lego attracts across different countries and regions is an often talked about subject. There is always a feeling that Lego, both with its own stores and online shop and with the suggested retail prices that most big Lego retailers use, doesn’t exactly play “fair” when it comes to pricing. The reasons for that are many and varied and are beyond the scope of this article. But what I would like to do is present some evidence that may help put into perspective some of the retail pricing discrepancies.

A couple of months ago Brickpicker expanded the information available to us to include data from 3 regions outside of the established US Ebay results. The UK, Australia (AUS), and Germany (EU) were all added to the information pages for each set. Along with the Ebay sales data we also have a small section showing the retail price of each set. It is comparing these prices that I would like to focus on.

For the purpose of this exercise I gathered the retail prices for 345 sets released in 2011 or later across many different themes. These 345 sets had retail prices available for each of the 4 regions. There are plenty of sets that have no retail price available in one or more regions so those were excluded. 345 sets should give us plenty of coverage to examine any differences.

To compare the prices in a meaningful way first we need to convert them to a common currency. So I took all the prices for the other three regions and converted them to US$ prices using the latest currency exchange rates as follows:

Now all the prices are converted we can compare the averages across the 345 sets:

From that picture you can see all the regions above the US in terms of pricing. “Aha, but wait!” some of you may be saying, “What about sales taxes like VAT?”. A very good question! Each region has a different form of sales tax added into the retail price. The UK and Germany have VAT (Value Added Tax) and Australia has GST (Goods and Services Tax). In the US the sales tax depends on which state you are in and is added on top of the retail price when you pay. Therefore to compare prices accurately we need to remove the sales tax component from the regional prices at the current rate:

VAT was increased to 20% in the UK in 2011 so that was another reason to limit the set data to that year and after to make things easier to analyse.

We can now look at the averages for each region with the sales taxes removed:

Things are a lot more even now. The UK is almost identical to the US and the EU price is 5.0% higher. Aus is still up there 28.9% higher than the US though. This gives us a snapshot of how current retail market prices differ at the overall average level. I then wondered if there was any differences between themes. So here is a look at the 345 sets broken down by themes and ranked based on the variance of the average of the 3 other regions compared to the US:

This table throws up some stark differences in the prices across the themes. You can see that Spongebob has the highest variance but only 4 sets, followed by the heavy hitting Super Heroes theme whose 18 sets are on average 28.1% higher than the US. 50.5% higher in Australia in fact! Interestingly we have the Technic set at the bottom, where apart from Australia the other 2 regions enjoy a decent discount below the US price. This is probably why the recent sales on some Technic sets at Amazon.uk have proved to be very popular with members here, with many importing them from the UK to the US at excellent prices even after shipping costs. City is another big theme where the variance is positive for those two regions as well.

How about the best (I guess best depends on which country you are in), or highest and lowest individual sets? Starting with the lowest:

The lowest i.e. the set with the lowest prices in other regions compared to the US goes to the 7553 City 2011 Advent Calendar which is an average 35.2% lower than the US retail price. In fact the top (bottom?) three spots are taken up by advent calendars with the 9509 SW one and the 2012 City one coming in next. The 42007 Moto-cross Bike comes in next with -20.4% difference, certainly one to look out for perhaps if another sale comes up.

The highest i.e. the set with the highest prices in other regions compared to the US is the 6873 Spider-Man's Doc Ock Ambush set with an eye-watering 58.9% average premium in the other regions compared to the US. 6867 Loki's Cosmic Cube Escape with 57.2% and 6866 Wolverine's Chopper Showdown with 57.2% as well. So if you live outside the US and are shopping for those Super Heroes sets it look like it could be a good option to import them from the US. All dependent on what sort of retailer discounts are on and shipping/customs costs of course.

Conclusion

Currency exchange rates do fluctuate and these can have quite a bearing on the differences between the regional prices. For example the AUD was trading at above $US1 for quite a while earlier this year before dropping 10% in value recently. This is probably one of the main reasons that Lego prices things differently due to what currency rates they have locked in long term through hedging mechanisms etc. Because of these changes I may look to update this info perhaps quarterly or 6 monthly.

The overall differences between the regions after sales tax removal have been less than I had envisaged. Though the swings between different themes and individual sets with them have been wider than I thought. It would seem Lego likes to price things not only on currency but what the market may bear. I’ll leave the possible reasons for another discussion or feel free to post your thoughts in the comments below.

I have done several articles about selling on Ebay, and several other BrickPicker members have as well. You can tell by just trying to sell on Ebay, or reading there articles that selling on Ebay includes quite a few different choices about how to list: Do I offer Free Shipping? Buy it Now or Auction? When do I end the Auction?

I have been doing a lot of different articles touching on each of these and I wanted to touch on another big one that I felt could have an impact on sales and also offers a lot of different pros and cons. Should you offer returns on your Ebay listings?

As a buyer in any marketplace, returns seem like something that you always want. I frequent quite a few flea markets and such and I know I am a lot more careful about what I buy there because they don't offer returns. In general, I want to get the item a little cheaper because I know I am taking a chance. But does that logic apply to Ebay?

I think most people that have been on Ebay from its conception know that there was a time when returns mattered quite a bit. In the first days of Ebay, there were a lot of people committing fraud as there is with any new marketplace. To protect themselves, buyers started targeting items that offered returns and Ebay encouraged this. This meant that it definitely mattered if a seller allowed returns.

However, Ebay eventually came out with this awesome buyer protection system quaintly named “Ebay Buyer Protection” which pretty much should be called “We only care about Buyers on this site so we will do whatever we can to protect them even if it's their fault” (sorry I have run into this as a seller as I am sure many of you have). Anyway, once this was out, it wasn't such a no-brainer to offer returns. Most people would see they are protected from poor listings, bad selling practices, and just general bad listings by Ebay themselves. So does offering returns really benefit the seller anymore? Will people still purchase an item with no returns allowed?

A quick note before our discussion about Ebay Buyer Protection. In case you aren't familiar with this, it allows a buyer to open up a case with a bunch of different options like “item not as described” or “haven't received item” and if the seller doesn't make good on it, in 99% of cases Ebay refunds your money whether the buyer is right or not. When the buyer is right, it's 100% (This is in my experience).

So for this article, I decided to go through the pros and cons of offering free shipping with a very fine toothed comb, and then do a little bit of Ebay research to help us make an informed decision about offering it.

Pros

First off, one would think that offering returns allows a buyer to feel a little better about the purchase. I think this definitely makes a big difference if the item is priced a little higher than market value in a Buy it Now (BIN) listing. If the item has something slightly wrong with it, I think this matters a lot more as well. For example, I chose to offer returns on an item I was selling where the box had been damaged and the minifigures had been pilfered. I felt that this was going to create a feeling of “nothing to lost” since seeing a box destroyed like that can make someone feel weird about the contents.

Another plus would be Ebay's filtering system. On the left hand side, Ebay allows a buyer to filter listings by “returns accepted”. I don't have a direct access method to all of Ebay's internal data, but I would assume there are some buyers who filter out any items that don't allow returns or otherwise it wouldn't be there. Think about it in this manner: Let's say you got big time burned on an Ebay purchase because the listing was misleading and you didn't read it closely enough (An example: I was buying a Lawn Mower bag system for my Lawn Mower which includes a bag and the frame to hold it on the mower. Unfortunately, the seller's picture showed it with the frame in it, but the listing just said “Lawn Mower Bag”. I purchased it and was disappointed.) You would think that there is a good chance if this buyer purchases something again, especially a very expensive retired Lego set, that they would possibly filter out any listings that don't accept returns so that they are not burned again.

Offering returns does also make you look very professional. What do you think of a store when they have a large sign that says “No Refunds or Exchanges”? You generally, you probably assume there is a reason they don't allow them.

Cons

One pretty obvious con to offering returns is the fact that you, the seller, can get burned by a buyer. In terms of Legos, I believe I have seen several people here complain about Ebay buyers not reading their listings when they say something like “No Minifigures”. If you offer returns, the buyer can ask for a return and be fairly justified to Ebay even though you made it completely obvious in the listing that the item didn't include this. Unfortunately offering returns sometimes protects the buyer further than Ebay protects them from their own buying stupidity. From my anecdote in the last section, that seller did offer returns, but after speaking with him I felt he made the error in the listing without any malice and his price was still relatively good for the bag, so I didn't return it. I hate when buyer's do this so I didn't want to even come close to being one of those.

Another implied con from our pros above is that your listing could be filtered out in an Ebay search. We don't know how many people click these, but I think especially if you are selling a Lego set that hundreds of others are as well, a buyer may look more and more to find the perfect listing. Because Ebay offers that check box right over on the left side, this is a very easy way for a buyer to just quickly filter down listings to find the best one to buy. If you are selling a very rare Lego set, I doubt this matters near as much.

Another big one people forget is Buyer Fraud. I have had this happen before and it is something that a lot of people don't even think about. Here is the situation: A buyer purchases an item from you and then comes up with a legitimate reason to return it (or legitimate enough in Ebay's eyes to return it). They then deny the free shipping label from Ebay buyer protection or they ask for the refund and return outside of the normal case system and ask the seller if they can return it and they would pay free shipping. In the times I have seen it I will get a message saying “I purchased this item from you a few days ago. I unfortunately just had a family problem and will need to return this item as we are very strapped for money. I would be happy to pay the return shipping”. In this case, the seller will feel bad for them and allow them to return the item because they are not really out anything but the shipping and don't want negative feedback.

Unfortunately what actually ends up happening is the buyer never sends the item back. The seller has already refunded the money to them because they needed it, but the item is never received. When the seller contacts the buyer, they will offer a fabricated/photo-shopped shipping label showing they sent it and always saying they couldn't pay for tracking. Eventually the seller has nothing to prove they never got it and the seller is out. I have had this happen twice to me and have had to change my practices accordingly (luckily it was two very cheap items so I was not too concerned. Price of doing business).

The last obvious con would be – a seller can return it. This costs you money and time. No one wants to have an item returned to them because of the ordeal of shipping and the feeling you get when you sell an item.

We all also know that we are pretty anal about box condition. If shipping hurts it in any way, you are in trouble.

Ebay Analysis

For this analysis, I did several things. I wanted to find three retired sets that sell quite a bit each month on Ebay and draw some conclusions about Ebay's return offerings and how they actually affect your listings. I think Auction and BIN listings are both relevant. In an auction, this will attract more buyers if you concede that some people are concerned with whether a seller allows them or not. In BIN, if you have it listed fairly high, the buyer is taking a chance on the item so offering returns gives them a little more of that warm feeling when pressing the button.

For these three items and my information, I came up with the following criteria:

• New listings: Though I definitely think this affects used listings, I feel that there are too many other factors to draw a good conclusion from the data. I am trying to get the listings as close as possible to each other to compare.
• Had to have at least 10 Auction and 10 BIN listings that accepted returns and 10BIN that didn't accept returns. For the Auction price, instead of finding ones that don't accept returns, I am using the average price for comparison that is found on BrickPicker.
• Three separate themes just so we get a little variety.
• No add-on's or exclusions, sealed new listings only.

For this as well, shipping is averaged in. We have a control with calculated shipping because it is going to my address each time. Because of this, I filtered out international sales as well.

I came up with these three sets:

• 4867 battle at Hogwarts
• 10212 Imperial Shuttle
• 10219 Maersk Train

Auction listings

For this, I took the average of all the auction listings that accepted returns that were shown on Ebay (last three months of data) and then compared them to the BrickPicker average:

4867 Battle for Hogwarts:

27 Auction listings that allowed returns: $83.78 average
BrickPicker new Price = $82.68

Percent above BP average = 1.3%

10212 Imperial Shuttle

12 auction listings that allowed returns: $362.87
BrickPicker new price = $354.69

Percent above BP average = 2.3%

10219 Maersk Train

10 auction listings that allowed returns: $216.87
BrickPicker new price = $210.46

Percent above BP average = 3.04%

Percent average above BP value = 2.2%

Buy It Now Listings

For this I took the average of the top 10 sold BIN listings for each: listings that accepted returns and listings that did not

4867 Battle for Hogwarts

BIN with returns accepted average = $109.67
BIN with returns not accepted average = $101.76

Average percent gain by offering returns = 7.8% gain

10212 Imperial Shuttle

BIN with returns accepted average = $430.05
BIN with returns not accepted average = $413.62

Average percent gain by offering returns = 4% gain

10213 Maersk Train

BIN with returns accepted average = $252.14
BIN with returns not accepted average = $239.57

Average percent gain by offering returns = 5.2% gain

Percent average gained = 5.7%

Analysis: For our auction listings, I expected a minimal gain and that's exactly what we got. That seems to suggest that maybe there is that last bidder looking over the listing and decides to put one more bid in for a dollar more because they see that if anything is off, they can return it. This is nothing to base your whole decision to allow or disallow off of, but I think it is something to think about.

For the BIN listings, I think it's obvious it matters quite a bit more. If you are offering your item for quite about above everyone else's because it really is MINT, or you just like making big money, this only adds a bit of comfort to the buyer who is about to overpay for the item. 5.7% is pretty substantial.

Final Thoughts

So looking at the pros and cons, I would lean towards allowing returns on items. We established that there is a good chance you will get a little more money out of your listing, especially if you are listing something in a BIN listing for more money than it's normally worth. Ebay makes it hard for the seller to really enforce a return policy anyway, so it's easier to just offer it and make sure your listing will get top price.

But, you should definitely protect yourself. First off, always charge a restocking fee and always put that buyer pays shipping. In extreme cases you can always go back on this, but you don't want to be paying out of your own pocket for a buyer not reading your listing. Also make this very clear in the listing that the buyer pays shipping and the restocking fee will be collected.

Also, don't ever accept a return outside of Ebay's system. Make sure you only offer the return once you get the item back and require that the buyer buy tracking on the item when it is sent back. This will protect you from any bad situations.

Note: I am going to research more and see about writing an article looking at used set data. At the moment, I can't find enough controls to make it good statistical information.

What do you all think? Does any of this information make you feel different about offering returns?

Note: All of the information here are my own opinions and are pulled from my experiences. You may or may not have success with these methods.

Most of us here love when we sell a set online, no matter what it is. That sound of "cha-ching" comes and we are in Ecstasy. It brings a feeling like no other .

But, unfortunately we are generally immediately brought down to earth by the fact that we now have to ship it. If you all are like me, you hate this part. You can never decide exactly how much shipping is going to be and whether you should add extra services. You always worry something will happen during the shipment. You ask yourself, Should I get insurance? Should I get delivery confirmation? Should I get signature confirmation?

I used to run a small side-project/business out of my apartment in college and shipped and received 100s of packages. I have had the best and worst experiences with each carrier so I can offer some direct experience with each and provide some advice towards our final assumptions. As well, I have compiled some research using shipping calculators so we can judge when we should use each service.

First off, we know that price is going to matter more than anything else, so I picked four normal package sizes based off common sets and then compiled the data. I then added a few inches to the dimensions (doesn't affect the price) and weighed boxes at these dimensions and rounded to give us a good control of what the boxes this size will add to the weight. Below weights are the total weight after the box is added.

I came up with the following: Weight Dimensions(LxWxH)

• Battle Pack size 2lbs 11x8x2
• Medium set (Orc Forge) 3lbs 12x15x4
• Large sets (Helm's Deep) 6.5lbs 24x16x5
• Massive set (Tower Bridge) 11.5lbs 42x12x18

Now I had to figure out distances to ship. I live in a southern state in the East, Alabama, so I decided to start from there. Shipping is all an equation used by the shipping entities, so I chose a short normal distance and a longer distance so we see a little of both and find out where we should use each service.

My short distance is about `280 miles, or Alabama to Kentucky. The results are below. The “Ebay” column inside the FEDEX part is the discount you get by using FEDEX through Ebay.

Here are the services time to delivery:

• USPS Priority 2-3 Days (Not Guaranteed)
• USPS Parcel Select 2-9 Days (Guaranteed)
• FEDEX (Home Delivery) 2-3 Day (Guaranteed)
• UPS (Ground) 3-5 Days (Guaranteed)

As you can see from the above data, for the two smaller package sizes, USPS is king. Parcel select is actually higher than Priority, which is weird, but USPS is significantly cheaper than the other carriers and they offer priority 2-3 Days which, though not guaranteed.

However, around the Large package, the FEDEX price starts to even out whereas the UPS and USPS (Priority) keep going up. USPS and FEDEX are basically on par at this point (Though through Ebay FEDEX is cheaper).

Once we get to the massive set, USPS parcel select seems to be the best option, but the length of time it could take might come into play (although this is a short distance so it may not be a problem). FEDEX is reasonable at $23.27, and with Ebay even more so.

Whats wild is that UPS is never really in contention at all. Unless you have a discount, you are going to overpay using UPS for a relatively normal shipping distance.

Now, I decided to do a longer distance, from the East to the West, so I chose Alabama to Arizona, or about 1500 miles. Here are the results:

This was really interesting. I had always assumed USPS was always the cheapest shipping company, but this doesn't seem to be the case.

USPS Priority is still the cheapest fast service for the Battle Packs and the medium sets. Parcel Select is just a slight bit cheaper, but not worth it in my opinion as going this far it will most likely take 5-6 days at least. You can spend 50 cents more and get guaranteed 3 Day with FEDEX Home Delivery.

Looking at the Large packages, there is no contest. FEDEX clearly shines above the rest. Its even cheaper that USPS Parcel Select which can take up to 9 days!

As we get to the massive sets, though, FEDEX takes a huge jump, most likely because they don't offer anything less than 2-3 days. USPS parcel select picks up the slack with a very reasonable $24.25. It may take quite a long time to get there, but its $20 cheaper which you or the buyer if they are paying it will appreciate.

Final Verdict on Price

USPS wins no matter where you are shipping for battle pack and medium sized sets. FEDEX is a close and acceptable second because of the guaranteed faster ship times. As the weight gets heavier within this range, FEDEX becomes the best option as the prices become negligibly different.

In the Large set range, FEDEX wins at both distances. Though USPS is about the same with Parcel select and just a bit more with Priority, FEDEX guaranteed delivery times puts them over the top.

As for massive sets, ship with USPS parcel select unless you have to get it there quick. You will save almost half off. If you have to ship it fast, ship it FEDEX or you are going to pay an arm and a leg.

Add-on options

Tracking and Delivery Confirmation

The most popular add-on is tracking as we all know hat tpeople want to know when their item is going to get there and where it is just in case there is a delay. All three services offer this. However, USPS is the only one that charges for it. If you go up to the counter, it is $.90, but online it is only $.20. Its worth it to have, but doesn't really change what we said about the price because when USPS won, it was by more than this small of an amount.

FEDEX and UPS both offer very robust tracking and update very often. They have complex computer systems that keep track of it and they are very good at estimating when it will be somewhere. This also makes it a lot more trustworthy if something goes wrong; you will always know where your package was lost.

USPS tracking is not on the same par with these two though. They do update it, but not very often and the timestamps are usually pretty far off.

Tracking verdict

UPS and FEDEX are equally good. USPS has it and its reasonable if you need it, but is not to the level of the other carriers.

Signed Delivery

USPS offers this for 2.20 flat no matter who it is and what the package is. FEDEX offers three services: Signature delivery (2.25), Designated Signature (3.50), and Adult only Signature (4.50). These are flat across any shipment. UPS offer 2 services: Signature delivery (4.25) and Adult only (5.25). These are flat across any shipment.

Signed Delivery Verdict

Most of us will only use normal delivery signature. Its about the same for USPS and FEDEX so both get the nod here. Again, UPS is price gouging.

Insurance

USPS rates are shown below:
$1.65 ................ $0.01 to $50 value
$2.05 ................ $50.01 to $100 value
$2.45 ................ $100.01 to $200 value
$4.60 ................ $200.01 to $300 value
Add $.90 per $100 in value

FEDEX offers free insurance up to $100 value, from $100-$300 value it costs $2.10, and for past that you add $.70 per $100 in value.

UPS is free up to $100 in value. Past that it is $.85 per $100 in value.

Insurance Verdict

FEDEX is a pretty clear winner here because they offer it free on the cheaper sets and has the lowest rate thereafter. Also, I have found that they and UPS are equally good at following through and approving insurance claims.

USPS unfortunately is the exact opposite and makes it a nasty process.

Reliability

This section is straight from experience as I have used all three shipping services as a buyer and seller and I also work for a company that has a deal with all three and I ship out things every day there as well.

USPS is by far the least reliable. You can't really trust their tracking and I have lost far more packages in their system. Also, they really struggle between corporate and local branches with communication. If you ever have a question or lose a package, everyone will tell you that someone else will know about it.

UPS and FEDEX are both pretty reliable. I have had really no problems with either of them losing packages. FEDEX would get the slight nod as they pretty much never leave packages on your doorstep. Some people may like them left, but if I am not home I would rather they take them back to the office than to set them on the doorstep and hope no one takes them.

Reliability Verdict

FEDEX and UPS are on even ground though FEDEX is more responsible about leaving packages.

Customer Service

This one is the most fun to comment on . In my experience, and plenty of others, USPS has worst customer service than people running a torture chamber. Generally, when I have to go in my local USPS, there is 1 person working with 500 people in the store. Most of the cashiers are generally rude. In the post office, you must pay for items like tape. They barely ever have pens out for people to use. And the line is always 20 people long at least. As I mentioned before, their corporate system is basically worthless to call as they don't communicate with the Local offices and can't really (or don't want to) look up anything. They get a resounding F.

FEDEX is my favorite. Most of them are way nicer than a normal post office inside. They generally have very nice customer service oriented cashiers who are very nice and very understanding and helpful. I recently went to one where they had misplaced my package for a moment and the women apologized no less than 10 times. I don't think I have ever heard someone from USPS apologize. Their corporate is really good – although I have only had to call them a couple of times because their local people get their stuff done. They will also give you free tape if you need it which wins awards in my book. They get an A.

The USPS is pretty nice too, really to the equivalent of FEDEX. I have had a couple of instances where I had weird items to ship and they always found a box and always had what I needed. They don't make you pay for tape and sometimes will just give you a box for free. They get an A.

Customer Service Verdict

FEDEX and UPS are even and USPS is a largely distanced 3rd.

Other considerations

• If you must ship across country, USPS does have priority flat rate shipping boxes. The smallest one will not fit any Lego sets that aren't worth shipping another way. However, for medium sized sets that weigh more than 3-4lbs and for some smaller dimensioned large sets, this can be nice as the medium and large priority boxes are around $10. Only use this though if you are going to ship something around 2000 miles or more as the shipping prices would be about $12 or over.
• If you are shipping something like a poly-bag that weighs less than 13 ounces, ship USPS first class mail. The others don't offer cheaper rates for small items bigger than a letter, but USPS does and its really cheap. Where FEDEX and UPS will cost you around $3-4 for a poly-bag, USPS will be in the sub $2 range.
• USPS priority is not guaranteed 2-3 days, but in my experience they meet this about 95% of the time or more, so don't let it factor into your considerations too much.
• If you are shipping with Ebay, check FEDEX prices as they get that nice 12% discount we talked about.
• Always make sure you print and ship online as the carriers, especially USPS, offer cheaper online prices to keep foot traffic out of the branches.
• Though UPS is expensive, a lot of larger companies have big deals with them. At my office, we can ship with UPS for almost half price. This is available to all employees for personal use.

Final Verdict

FEDEX gets the nod as the best shipping company. If you want to ship without insurance and are shipping something 3lbs or under, you can use USPS. Otherwise, if you want to factor in reliability, customer service, and the price for add-ons, FEDEX is the clear winner.

Does this change any of your opinions? Do any of your experiences contradict mine?

Note: All of the information here are my own opinions and are pulled from my experiences. You may or may not have success with these methods.
 

Arbitrage is a term used to describe the practice of using price variances between different markets in order to make a profit. This may mean different geographic markets such as countries, regions, states, or even cities and towns. The term can also cover selling in different time periods if you are buying in today’s market and holding to sell in a future market.

In the modern financial world using arbitrage is a common tool and it is what helps keep most international markets and prices stable. Currency exchanges and commodity prices all incorporate people using arbitrage methods to stabilise and set final prices. Even a small difference in prices or interest rates (interest rates are a form of price – the price of money) between two markets will be exploited by traders. As the commodity, stock, or currency is bought in the cheaper market and sold in the higher priced market, the cheaper market price begins to rise on that demand and the selling markets price falls to compensate for the extra supply, bringing prices into equilibrium. With something like currency this is almost instant, with computerised algorithms and automated buying and selling process taking advantage of miniscule differences and evening them out in microseconds, but it still makes profits.

With Lego many different markets exist and are ripe for arbitrage opportunities. A simple example that many of us investors do already without even referring to it as arbitrage is buying a set in a department store at a great discount and selling it straight away for a profit on Ebay or another selling market – arbitrage in action.

Now that Brickpicker has opened up the data that is collected for each lego set to include international Ebay sites in the UK, Germany, and Australia in addition to the original US information, we now have the ability to possibly identify arbitrage opportunities between these different markets. That is something I’d like to examine in this blog article. Can we analyse some of those differences and find opportunities to buy in one market and sell immediately in another? I think we can.

Opportunities exist between all 4 of the markets we have data available, but I’m going to focus on providing examples from just two – The US to UK pairing. Data has only been available for the non US sales for two months and it can be a little patchy for some sets so looking at Aus data is a little less reliable whereas the Euro (german) data has decent sales volume it would seem but we don’t have as many Brickpicker members from Germany. The UK seems to have the best possibility for discussion. I’m also only going to provide a few examples of arbitraging opportunities, I’m not going to list a whole swag of them or research them in depth for you. If you want to act on this information then I’d encourage you to do your own research first and to seek out other opportunities.

US to UK – Top 5 Price Variances

The table above shows the top 5 sets I could find in terms of percentage difference between the US buying price and the selling price in the UK once you convert the pound to the US$ at the current exchange rate.

I think you’ll be impressed and a little surprised by the potential profit margins those percentage differences represent! Now the obvious caution here is that some of the sets have low volumes in one or both markets, making their current market prices a little less reliable. That is why you must do your own homework when looking at these potential opportunities. But what it does show is that there are some possibilities that warrant a serious investigation.

A UK based seller can use these opportunities to import buy from US Ebay and sell locally on UK Ebay. There is also the opportunity for US based sellers to potentially sell on UK Ebay for better returns (I think this is possible to set up, but not 100% sure on the workings of Ebay account rules etc).

UK to US (the other way) – Top 5 Price Variances

How about looking at arbitrage in the other direction? High US prices and low UK ones? A US based seller can use these opportunities to import buy from UK Ebay and sell locally on US Ebay. There is also the opportunity for UK based sellers to potentially sell on US Ebay for better returns than on their local market. Lets look at the top 5 sets:

Now that’s some even more impressive possible gross profit percentages! Again the caveat is low volumes on most of those sets playing with the volatile market prices. But is that the case for all of them? How about every other set?

Well what I can also share with you is that on the US to UK price variance (the first table) I found at least 60 sets that had a percentage variance of 50% or higher. Sixty! Now within that there is sure to be opportunities. Hint: 8099, 10231, 4183, just a few to whet your appetite. Going back the other way I found 60 sets with over a 100% price variation! Plus another 100 that were between 50% and 100%. There is sure to be some gems amongst them. Hint: 8190, 7997, 10178.

Shipping and Fees

The straight price differences you see between sets and the ones I’ve presented here represent the gross profit potentially available. What they don’t account for is something I’m sure many of you will have been thinking about in your head since reading the opening title of this blog. Selling fees and more importantly shipping costs!

Firstly, selling fees are generally 10-12% of the sale price on Ebay from the Ebay fees and Paypal transaction fees. These fees need to be considered if you are buying in one market and intending to sell in another. However they don’t need to be a factor in the decision to sell in a different market if you already own the set. If you already own it and intend on selling it in your local Ebay marketplace then you will already be factoring in the fees to your pricing and decision to sell. Deciding to sell in the US or UK incurs no additional fee (that I can see – but I’m not an expert on Ebay fee structures).

There may also be some small currency conversion fees charged by your bank or financial institution. I get charged 1.25% by my bank. You can account for that by adding it in to the currency conversion calculator rather than taking the exact listed rate. Shipping costs. Now this is the major hurdle to overcome. It is where your own research must come to the fore in determining a worthwhile inter-country arbitrage opportunity.

Shipping costs will be the killer of many good looking deals. Finding the cheapest (whilst still reliable) method of shipping is a must. Polybags and smaller sets will obviously be the best potential sets here as the shipping costs should be minimised.

Conclusions

Arbitrage opportunities exist right now. They just need to be ferreted out and seized upon. I’m sure there are many traders doing this right now and perhaps even some of you Brickpicker members. The excellent new data we have available on this website has made finding opportunities easier and I‘d encourage those of you with the time available to hunt down the profitable trading ones after accounting for fees and shipping. Over time the data will get more reliable and I’ll be interested to see if some of the margins between markets begin to narrow as people look to shift sets from cheap regions to expensive ones.
 

There have been several articles in the site about pretty much every single aspect of LEGO Investing: from how to store your sets to some of the "Hazzards", as Quacs explained in his blog article However, there are some other factors we all need to consider when we decide to enter this particular way of investment: the costs.

I know it sounds pretty obvious, but I strongly believe that a lot of people even in this same forum, are not thoroughly consider all the costs they are incurring at the different levels of the investing process. Even though I know some of the investors out there are not as serious as some others about LEGO investing, I believe that it is extremely important for everyone to keep track of exactly how much money each set they are purchasing is costing them once everything is added. It is not just MSRP and taxes, there are gas costs, storage, wear and tear of the vehicle (if you purchase in store), insurance cost and, very important, opportunity costs.

For a relatively small investor, each of this costs can represent a significant reduction in their profit margins once you take into account all of the selling fees added by the various outlets like eBay and Bricklink. It is less of a problem for high volume sellers, as some of the fixed costs of a particular purchase trip (gas, tire usage) get spread out over the more sets that investor purchases vs. the 2 or 3 the small investor could afford. Still, someone who moves such high volume usually has his/her costs pretty well documented (I would hope)

In this article I will try to tackle each cost category and give you a small summary of each, so that you are aware and able to document them better when it comes time to determine your actual profits. I know most people will still do the easier Sale Price - (Price Paid + Fees), just know that, in the end, the number you get from that formula is ultimately flawed unless you consider every cost you incur.

Let's examine some of the costs categories:

Price paid for the set

Pretty self-explanatory, but a cost all the same. This would just be the price you paid for the item itself at the store, online, etc. This is one of the costs everyone will for sure account for in their profit calculations.

Selling Fees Another cost that I assume everyone takes into consideration are the selling fees the sites like eBay and BL charge for their service. This can be the single most important source of costs for LEGO investors, and while I know some previous articles have talked a lot about the multiple facets of selling in these sites I figured I would try to include some of the fees you are going to be incurring once again:

• eBay: Definitely the site with the most exposure for your items, but also the one with the most expensive fee structure. There are several other variables we would need to consider, like how Stores and Insertion fees past 50 items would affect your fees, but they are out of the scope of this article. The following is the basic fee structure most sellers here will need to deal with in the site:

• Bricklink: A lot cheaper than eBay and focused only on LEGO products. The site has just been sold, so there is hope for a more user friendly interface. Seller friendly fees, but less traffic:

• Brick Classifieds: Brickpicker's own selling platform soon to be live! It has been said that the only fees will be a small $ 1 charge per 30 day listing, so that would make it the best option out there, especially for big and expensive items. Even more, active participants in the site could be able to list several items for free.

There are some other selling platforms, but these should be the ones used by most investors as they provide the best exposure and increase selling chances.

Shipping

This is a cost usually born by the buyer, either knowingly (by specifically charging for shipping) or unknowingly ("free" shipping bundled in a higher item price), but it is important for the seller to keep in mind that eBay and Paypal fees will also take this into consideration when calculating their piece of the pie.

Other than the actual transportation costs, there are several other factors related to shipping that the seller has to keep in mind:

• Packing supplies: This includes everything used by the seller both in the packing and shipping process. There are costs associated with the boxes, packing tape, paper and ink for label printing, bubble wrap and other protection items, and every single one of them will cut into your profits unless you take them into consideration when pricing and listing your item for sale.
• Trips to shipping offices: This cost will be expanded upon a little further in the article, but generally it includes gas and vehicle wear and tear.
• Time: Another factor I will explain later in a more detailed fashion, but for now it is enough to say that every second you spend shipping your products is costing you money.

Ways to save!: There are some cost cutting measures investors can take in every single one of the situations described above. Some of them include saving shipping boxes from purchase merchandise, sourcing boxes from local businesses, refilling printer cartridges instead of purchasing new ones, scheduling USPS pickups (free) or Fedex, UPS pickups (fee).

Sometimes, trade offs are needed, like say you consider your time to be very valuable and decide to purchase a label printer. This move will save you time, paper and packing tape, but will generate new costs including the purchase price of the printer and new type of paper. It is up to every investor to quantify both benefits and costs to determine if such a move is cost effective.

Deal Sourcing Expenses

This is one I am sure several people don't even consider taking into account when calculating their profits. Unless every single of your purchases is made online, there are several costs associated with driving around trying to find great deals on sets. I will list and examine some of them below, while providing you an example of the impact they might have in your bottom line.

• Gas: The most obvious of all. The drive to the several retailers will cost you money at the pump that will ultimately result in a profit reduction, whether you want to account for it or not. The actual cost will vary with you car's fuel efficiency, distance and current oil prices.
• Vehicle Wear and Tear: This particular cost is often overlooked, in my opinion, but can greatly reduce your margins. Just some of the costs included are loss of resale value, tire wear, engine wear, breaks and pretty much everything that makes your car work. These may also affect your car insurance premium.

Both gas and the several other wear and tear costs can be calculated by using AAA's Driving Costs estimates. They release a very good analysis every single year that gives you a very well done estimate about how much each mile you drive is costing you when taking into consideration most of the costs we named above.

Let's do a quick example of what 2013's edition indicates: Let's assume you drive the average 15,000 miles per year, including all your LEGO hunting drives. According to AAA analysis, the yearly cost per mile including all driving costs would be somewhere around $ 0.61. Let's say I drive 20 miles to several stores and come back home empty handed, then I would have spent around $ 12 for nothing that I would need to factor in my profit analysis in some way or another.

So, are all those "looking for clearance" trips really worth it? Let's see: (Time and taxes are not considered) (Amazon free shipping assumed)

We see that even after driving costs are accounted for, the Walmart price per unit ends up being $15 cheaper than purchasing in Amazon. However, this very simple scenario relies on several underlying assumptions that we know are not true for most investors, some are listed below.

• The scenario above assumes that the investor only drove to the Walmart and back home ONCE and was able to find those great clearance deals. What are the odds of that? very small. Most of the time we read about investors making multiple trips, sometimes very long distances, to the same stores and finding nothing or very insignificant discounts. Once you account for all those lost trips, the cost per unit purchased in stores is greatly affected. Assume that the same investor of the above scenarios made 3 previous trips hoping to find clearance deals, those three wasted trips had a cost of $ 36 in total, putting the 2 VCs at about $ 93 each. The investor is now losing money in the long run.
• I am sure a lot of people here drive way more than 20 miles looking for clearance deals at several different stores in their cities. In those cases, the results would be even worse.

Ways to save!: The single best piece of advice I can give you here is to make most of your purchases online. Sites like Amazon and eBay often have extremely good discounts on LEGO sets, and the fact that there is free shipping and no need to get in your car and drive around already saves you a lot of money in the long run.

If you are still reluctant to abandon your clearance drives, then it is extremely important that once you find a good deal you buy as many sets as you can. The more sets you buy the more spread out your costs will be. Buying just 1 or 2 sets at 30% will greatly hurt your returns long term.

Inventory Storage

Unless you have several empty rooms in your home or you only plan to get a couple dozen sets as investments, renting a storage unit will eventually become a necessity. I am sure most of us in this page have not faced that need just yet, but as our inventory grows and we generate enough money to keep increasing it, we will need to either consider renting storage space or just limit our earnings and inventory to the currently available space.

If you are interested in growing your LEGO operation by re-investing as much as your capital as possible, then the need for more space is in the horizon for you. Obviously, you will be incurring in a monthly rental cost. Furthermore, given the nature of LEGO boxes, a climate controlled unit would be a must in order to protect them from the elements and varying temperatures.

Just as a reference, a 5'x5'x8' climate controlled unit runs at about $ 50 per month at my local U-Haul. This article is not intended to be a guide to storage costs or any other cost really, just to present to you some of the different costs and give you some examples on how they can affect your earnings.

For small investors, shelving units will more than likely be only expense related to the actual storing of the sets, but still something that needs to be accounted for in your calculations. Depending on the size and quality of the shelving unit, you might end up paying anything from

Ways to save!: Not much I can really add in this section. As long as you have space in your home or at some other personal location I would suggest to just buy plastic shelving units and store there as many sets as you can fit. If you see a great deal on shelving units and you know you will continue to invest in new sets, just grab them!

Once you start managing large quantities, looking for the cheapest storing unit around you could be your only choice.

Insurance

Again, something that it is often overlooked by new LEGO investors. If you are planning to invest in several dozens sets, sooner rather than later you will want to make sure your inventory is covered by insurance, especially if you live in some high risk areas (flooding, tornadoes, hurricanes, etc.). It is very easy to reach several thousand dollars in LEGO inventory in a relatively short period of time, and that is actually something you can see for yourself with some forum members. Are you willing to risk losing thousands of dollars in an effort to avoid an insurance premium?

Ed wrote a very good articleon this topic a while back, where he analyses some of the various options investors have to insure their inventory. At the end of the day, most times you will end up paying something extra in the form of insurance premiums to avoid big losses, so that is something worth considering when performing your calculations.

Ways to save!: Inquire with your homeowners insurance policy. Some companies will be willing to add your collection to the home's police for little or even no money at all, depending on your particular insurance. Document every set you own and keep good records of their market value, you will probably be updating those fairly frequently. If you own a small collection or live in an area that is not prone to many risks, you can consider avoiding insurance until it becomes a necessity. No need for me to say that you do so at your own risk, right?

Debt Interest

This is one cost I would recommend every single investor to avoid. Unless you are able to pay your credit card balance IN FULL each month or have a promotional APR of 0$ for a while, I would not recommend anyone to use their credit card to invest in LEGO. The interest rates will eat significant amounts of your profits to the point you might be losing money without even knowing it.

Ways to save!: I understand that some credit cards offer some really nice reward programs and benefits, but as said before just pay your balance in full and avoid interest charges on your LEGO purchases. Consider getting debit cards that will give you some rewards without actually lending you money. The Target Debit Red Card is just one example, no interest and still gets you free shipping and 5% on all purchases.

Taxes

I don't really have much experience in this topic, but do know that you are responsible for the income generated by your investments, and that would include LEGO. Whether you have some deductions or don't have to pay taxes for some reason or another is something you should discuss with a tax professional. Just be sure to consider these and analyze their impact on your bottom line.

Time

We finally get to the last 2 cost categories, and probably the two I consider the most important. Whether you like to believe this or not, your time costs you money. In fact, the cost of your time is present in almost every single cost category we have described so far in this article, from listing items for sale, shipping and packing, to driving around checking for deals.

If there is a cost that is harder to account for than the rest, then this is it. There are just so many different variables that need to be considered to provide even a semi-decent hourly estimate. For example, someone who is unemployed and does absolutely nothing every day will and should value their time differently than someone who makes $ 30 an hour working at a bank. For the unemployed individual, it might make more sense to spend his time walking from store to store looking for great LEGO deals and selling them for a profit, while the well off executive will for sure be wise to spend his time on his job rather than running around looking for a $30 discount.

It is impossible for me to tell you how much your time is worth, I just don't know anything about what you do or do not do. It is up to you to figure out a way to value your time, even do it per hour just like a salary. What I DO know is that you need to account for this when evaluating the results of your investments. To put this into perspective, why do you think some people outsource their investments to "Experts"? they are just aware that instead of spending hours researching potential investments to make an extra 0.1% return is not the best way to spend their money.

Ways to save!:Know the value of your time, and make choices accordingly. Again, try to make the bulk of your purchases online, it only takes a few minutes and you forget about the item until it arrives. Also, consider using some time saving tools if you manage a large volume of items, these range from physical items like label printing devices to some other services like creating a Fedex shipping account that provides package pick up, or signing up for an online tool that makes it easier for you to deal with everything that has to do with inventory and eBay listings (Something like Auctiva or other providers) Even little things like automatic email responses and feedback will add up in the long run and put your time to its best use.

Opportunity Costs

This category has a lot to do with time as well, but it goes even further. What opportunity cost means is what are you missing out on by using both your time and capital in LEGO investing.

For example, let's assume you get an overall 15% on your LEGO investments in 2013. Some of your opportunity costs involve anything that you could have used your original capital that year but did not do because you decided to invest in LEGO sets. Some can be things like a vacation, a car, college, and a bunch of other things. However, my focus is going to be more towards other investments,

The 15% in LEGO you made this year may look great on its own, but what if a passive investment like an S&P Index Fund produced a 20% result that year? then your opportunity cost would be that extra 5% you would have earned by forgetting about LEGO and going into stocks instead.

The concept of the time value of money also plays a role in this category. Keep in mind that buying a set and holding it for 2 o 3 years before actually selling it keeps you from using that same money to earn a return during that period of time.

Ways to save!: I can't think of an actual way to save in this category other than making sure you make the best decision possible with the available information. Think things through, use critical thinking and you'll reduce your chances of being disappointed with your decisions.

NOTE: If you are just going to remember one thing about this article, I suggest you choose the actual cost of driving your car for miles and miles looking for great deals that more often than not end up not being there.

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LEGO investing is not a get rich quick scheme, it actually takes patience, critical thinking and LOTS of time and capital. Also, as you can see, the actual costs of investing in LEGO go way beyond what most people seem to take into consideration. It is extremely important for LEGO investors to actually take every single one of these costs into account to determine how much money they are actually making in the end. I know this can be overwhelming, and some may argue that they are only doing this to fund their personal collection or to have fun, but not evaluating the actual costs you fail to determining your real profits. As a result, you may end up not funding your personal collection at all and actually lose money in the process of "having fun".

Related Reads:

• Beginner's Guide to Investing LEGO Style - By Quacs
• Maximizing Profits - By Eschdaddy
• Shipping Wars and LEGO - By Stephen Rockefeller
• LEGO Storage Wars - By Mos Eisley
• Insuring your LEGO Collection - By Ed Mack
• The "Hazzards" of LEGO Investing - By Quacs
• Different Strokes: Investment Strategies- By Grolim
• Discounts and the Effect They Have on your Investment - By Grolim
   

While I was writing a review for the 10174 AT-ST UCS set I came across a phenomenon that had me intrigued. It was quite evident that the set had experienced a recent surge in secondary market price growth. After finishing that review I have been researching other sets that seem to share this second wind renaissance.

Firstly I’m going to repeat a bit of the information from the 10174 review to set the scene before moving onto a few other prominent examples of second wind growth.

10174 AT-ST

Looking a closely at the available data n the 10174 set page you can see that the return over the last 12 months has been 49.42%. A fantastic growth over just one year for a set that has been retired for some time now. That is on a sales volume of 193 new units sold on Ebay US so it’s not a small volume issue playing with the results here. In fact there was an 8.72% increase in the last month alone. What we are seeing here is a renewed price spike for this set. Lets investigate a bit further by graphing the price of the set over time using the data points we have available:

The graph shows just what an extraordinary second wind this set has got over the last 2 years. I’ve taken the liberty of assuming a 25% price drop in the first year to simulate the discounting that was most likely on offer at the time. The line then climbs steadily over time to reach our first “real” data point that we have available from the 2 years ago time period. The price then climbs steeply over the next two years to reach our current market price. Care must be taken when interpreting this line as the time period scale on the x-axis is not linear i.e. the gap from 2010 to 2011 represents 1 year’s growth whereas the gap from 1 month ago to current is growth for just one month. To try and illustrate this better I’ve taken the liberty of annualising the percentage changes from one period to the next e.g. the growth of 8.72% for the last one month gets multiplied by 12 and the gap from 6 months ago to 1 month ago gets divided by 5 (because of the 5 month gap) and then multiplied by 12. In this next graph I've plotted the results:

The recent growth spike is very evident in the above picture. Incredible stuff for a set that has been retired this long. It’s almost been a “sleeper” type set for a long time and now people may have awaken to this relatively cheap older UCS set as more and more become interested in Lego investing.

Other Recent Growers

Spotting other sets that follow this pattern is not straight forward. You have to look back at a set that has been retired for some time as you don’t want to confuse an initial post EOL price spike with a new surge in growth. We also have limited pricing data history going only back as far as Brickpicker came into existence. For this reason I looked at sets from 2008 and prior. The other fishhook to be careful of is sets with low sales volumes. There are plenty of sets that jump up in the pricing charts that are quite old and rare and they have only a handful of sales that make any meaningful inferences from their short term variations extremely hazardous. So for that reason I imposed an arbitrary volume of at least 25 sales in the last year.

4483 AT-AT

Let’s start with the big brother of the AT-ST, the AT-AT from set 4483. Here are the same graphs as above but for set 4483.

Again we can see the recent acceleration in price growth. With this set being a decade old it really is even more impressive that it has experienced over 36% growth in the last year. This is well above its long term CAGR of 10.71%. Clear evidence of a new growth phase. Has the last month indicated a cooling though? Well it’s hard to tell just with one isolated month of growth so I’d caution against inferring that just yet.

7194 Yoda

Here’s another example from an older Star Wars set. The UCS Yoda was released back in 2002 and has had a solid 12.04% CAGR over the 11 years since it was released. But lets have a look at the charts and see how the recent performance relates:

An impressive 76.72% increase over the last 2 years and a 34.57% increase in the last 1 year have seen the price growth accelerate well beyond the historical average. Growth of “only” 10.56% in the last 6 months has cooled things off a little as reflected in the dip near the end of the Annualised movement graph. Though the latest month may show things haven’t quite abated yet.

8272 Snowmobile

Here’s a non-Star Wars example now. The 8272 Snowmobile set released in 2007 has had a CAGR of a very respectable 15.86%. However, the recent growth has been far more impressive:

Growth of 40.21% in the last 6 months has seen the set take off over recent periods. What we also get with this set is because it is a more recent one released in 2007 there is a clearer picture of its initial post EOL growth from retail up until 2 years ago in 2011. After which this set follows the pattern that many other sets do with a flatter growth, and in this case a small drop. Now we are entering a second wind growth phase, and I say entering as most of the growth looks very recent. This set could be a good option to invest in right now if you have the risk appetite.

Conclusions

There are plenty more examples of this phenomenon out there if you want to research for yourself. A couple that might be worth a look are the 10183 Hobby Trains and the 10143 Death Star II UCS sets, both of which have more than doubled their usual CAGR growth in the last 12 month period.

What I think we can take away from this is yet another example of how retired sets can still be good investments long after it may seem their growth has diminished. Picking them may require more work and research than just grabbing some retail sets at a discount and waiting for them to EOL. But the rewards from doing so could be instant and impressive. The savvy investor could also use this strategy to diversify away from the herd a little. One thing you can guarantee with older sets is that their supply is limited and the growth starts from day one, which are two unknown factors eliminated immediately from the decision matrix.

How do you pick them? Well that would be telling… but I will say it isn’t easy and that the risks are that you will be too late to enjoy any growth. Past success is not a guarantee of future performance, but it does hint at it. The best strategy may be to look at the 6 month returns and probably the 1 year returns as well and isolate the ones that are well above the CAGR. I’ll leave that research up to you though

When doing some research on Ebay for another article I did, Should I throw away the box from the set I just opened? I noticed some outrageously high prices for used sets on Ebay - way over the Brickpicker pricing. At first I just figured these were just some Buy It Now (BIN) listings that one poor sap jumped on, but looking through them, more than half were auctions where tons of people bid. I became curious as to why – what makes these auctions so appealing that people spend extra money over the average Ebay price on the used set?

I decided to find out and report some raw data back along with some of my conclusions that would put together a good example of how to maximize what you can get for your used set on Ebay. For my data, I picked sets that are well retired and sell often on Ebay. I wanted these to be several different sizes and all have good used growth so we would get a wide range of results.

I came up with six sets I decided to do:

• 10030 SW Star Destroyer
• 10143 SW Death Star 2
• 10196 Grand Carousel
• 10217 HP Diagon Alley
• 6211 Middle Star Destroyer – went with this so I had a little bit of data on the same set – just large and small of it
• 7741 UCS BatMobile

Now I decided to look each of these sets up Used on Ebay. Old listings on Ebay only last for 90 days, so this is guaranteed to be recent data. I looked up the sold listings by “Used” and “Highest price plus shipping”. I took one BIN and one Auction from each and recorded all the details from them. From this we can discern two general things: What it takes to maximize profits on a used set and what it takes in a BIN listing to have someone pull the trigger.

First a few of the rules of my search:

• Sets are allowed to be incomplete (As this proves how well they created the listing) but cannot include any significant extras like other sets or minifigures.
• Shipping is only included if it is a flat rate – otherwise we will use a control shipping amount of $10
• All listings were from US- Not discriminating, just a control.
• Sets that were listed as used but actually sealed are excluded.
• Sets that only had one bid were disallowed

Now for the data. The criteria from the listing I pulled are explained below:

10030 Star Destroyer

BrickPicker Used Set Price: $631.04

BIN Listing Sold: $948 plus calculated shipping (10$)

Percent over BP Price: ((958/631.04)-1) *100 = 50.2%

• Included everything, box and instructions
• Had an extended description of the item and how it was used under the Ebay condition of “Used” (This is something you can set up in your listing where you expand on why it's marked the way it is. It appears directly under the “condition” section at the top of the listing.)
• Mentioned the pieces were separated in Ziplock bags
• Details what's not there : Inner Boxes
• Ebay Store
• Described how he ships with insurance, and how the box will be packed.
• Had a picture of each individual part of the set, instructions, box, pieces.
• Doesn't mention smoke free.
• Colorful
• Mentions rules (these are things that a seller says about how payment must be, how feedback must be, etc,)
• High Feedback and rating.

Listing: http://www.ebay.com/itm/LEGO-STAR-WARS-10030-IMPERIAL-STAR-DESTROYER-UCS-COMPLETE-SET-MANUAL-BOX-/321128057125?pt=Building_Toys_US&hash=item4ac4b94925

Auction Listing Sold: $860 plus calculated shipping (10$)

Percent over BP Price: ((870/631.04) -1)*100 = 37.9%

• Included everything, box and instructions
• No extended Description
• Doesn't say how shipped
• Described all parts that had wear and imperfections.
• Up-close pictures of the box and instruction manual and the set itself 10 pictures.
• Not Ebay Store
• Described how it would be shipped: included insurance and delivery signature.
• Pictures of all wear along with individual parts of set.
• Smoke free
• Ended 4:30PM PDT on Sunday
• Not really high feedback

Listing: http://www.ebay.com/itm/LEGO-Imperial-Star-Destroyer-10030-Ultimate-Collector-Series-/310669058297?pt=Building_Toys_US&hash=item485551a0f9&nma=true&si=%252FZDV%252BMT2o3W%252Fhz0JThzyuYnz%252Bc8%253D&orig_cvip=true&rt=nc&_trksid=p2047675.l2557

10143 Death Star

BrickPicker Used Set Price: $534.20 although around $580 when sold (will use $580)

BIN Listing Sold: $898 plus calculated shipping (10$)
Percent over BP Price: ((908/534.2) -1)*100 = 70%

• Everything included, box and instructions.
• No extended description
• Mentions separated in ziplock bags
• Ebay Store
• Describes whats not there – inner boxes
• Explains how it will be shipped with insurance.
• Detailed condition description
• individual pictures of each part of the set.
• No mention of smoke-free
• Colorful
• Mentions rules.
• High feedback and rating.

Listing: http://www.ebay.com/itm/LEGO-STAR-WARS-10143-UCS-DEATH-STAR-II-COMPLETE-SET-ORIGINAL-MANUAL-/221225299902?pt=LH_DefaultDomain_0&hash=item33820e2fbe&nma=true&si=%252FZDV%252BMT2o3W%252Fhz0JThzyuYnz%252Bc8%253D&orig_cvip=true&rt=nc&_trksid=p2047675.l2557

Auction Listing Sold: $790 plus $30 shipping
Percent over BP Price: ((820/534.2) -1)*100 = 53.5%

• Includes Everything, Box and instructions
• No extended description
• Explains why selling the item.
• No real description of the item.
• No Ebay Store.
• Shipping with Insurance.
• Pictures of each part of the item.
• Smoke Free home
• Mentions Rules.
• High Feedback
• Ended 11:27PM PDT Saturday

Listing: http://www.ebay.com/itm/Lego-Star-Wars-UCS-10143-Death-Star-II-100-Complete-/161043619163?pt=Building_Toys_US&hash=item257ef29d5b

Lego 10196 Grand Carousel

BrickPicker Used Set Price: $836

Auction Listing Sold: $910 plus $28 shipping
Percent over BP Price: ((938/836) -1)*100 = 12%

• Comes with everything but the box
• No extended description
• Detailed description of the item and assures buyer they are all in good shape
• Pieces separated in Zip lock bags
• Describes all imperfections
• Explains why getting rid of it
• Shows pictures of each piece and how its bagged separately.
• Not an Ebay store
• No mention of the shipping
• Mentions smoke free home.
• Very colorful
• Mentions rules
• High feedback
• 5:09PM PDT on Tuesday

http://www.ebay.com/itm/LEGO-GRAND-CAROUSEL-10196-NO-BOX-/130937532512?pt=Building_Toys_US&hash=item1e7c7c3060

BIN Listing Sold: $899.99 plus calculated shipping ($10)
Percent over BP Price: ((909.99/836) -1)*100 = 8.9%

• Includes everything but the box
• No extended description
• Describes some wear on the books
• Describes how great the set is
• Tells you how they are separated in bags by color
• Not as Ebay store
• No mention of shipping details
• Shows pictures of boxed item and the parts inside
• No mention of smoke-free
• Colorful
• High Feedback and rating

Listing: http://www.ebay.com/itm/Lego-GRAND-CAROUSEL-Set-10196-100-COMPLETE-inc-ALL-MINIFIGS-instruction-bks-/261217188213?pt=Building_Toys_US&hash=item3cd1c1f975

10217 Diagon Alley

BrickPicker Used Set Price: $176

Auction Listing Sold: $248.35 plus Free Shipping
Percent over BP Price: ((248.35/176) -1)*100 = 41.1%

• Everything included, Box and instructions
• No extended description
• Pieces are separated by bag number in bags
• Lightly touches on condition
• Not an Ebay Store
• No mention of shipping
• Pictures of everything it came with
• Smoke-Free
• Ended 6:41PM PDT Monday
• Low number of feedback

Listing: http://www.ebay.com/itm/Lego-Diagon-Alley-10217-Harry-Potter-Hagrid-Malfoy-Weasley-Hermione-minifigs-/121095099975?pt=Building_Toys_US&hash=item1c31d49647&nma=true&si=%252FZDV%252BMT2o3W%252Fhz0JThzyuYnz%252Bc8%253D&orig_cvip=true&rt=nc&_trksid=p2047675.l2557

BIN Listing Sold: $225 plus calculated shipping ($10)
Percent over BP Price: ((235/176) -1)*100 = 33.5%

• Everything included, Box and instructions
• No extended description
• Run on sentence through whole listing
• Individual bags
• Assures all pieces present
• Not an Ebay Store
• No mention of shipping
• Pictures of each individual piece put together
• Smoke-free
• Barely any feedback at all

Listing: http://www.ebay.com/itm/Harry-Potter-Lego-Diagon-Alley-10217-/171038391583?pt=Building_Toys_US&hash=item27d2aebd1f

6211 Star Destroyer

BrickPicker Used Set Price: $140.33, was about $155 last month (we will use $155)

Auction Listing Sold: $284.99 plus Free Shipping
Percent over BP Price: ((284.99/155) -1)*100 = 83.8%!!!

• Includes everything but box
• No extended description
• Mentions it will come disassembled but nothing about bags
• Says where he got it
• Possibly incomplete and describes condition as Excellent
• No mention of shipping or insurance
• No mention of smoke free
• Pictures of individual parts and booklets
• Ebay Store
• Ended at 9:49 PM PDT on Saturday

http://www.ebay.com/itm/LEGO-ESTATE-FIND-STAR-WARS-6211-IMPERIAL-DESTROYER-99-COMPLETE-WITH-MINIFIGS-/400508526016?pt=Building_Toys_US&hash=item5d402b1dc0

BIN Listing Sold: $224.98 plus 14.99 shipping
Percent over BP Price: ((238.97/155) -1)*100 = 54.2%

• Includes everything but the box
• No Extended Description
• Describes condition
• Never been played with
• Doesn't mention how it will come (assembled or not)
• Stock picture
• Not an Ebay Store
• Doesn't mention how it will be shipped
• Smoke-free
• High feedback and rating

http://www.ebay.com/itm/Lego-Star-Wars-Imperial-Star-Destroyer-6211-100-Complete-Mint-Condition-/181129900994?pt=Building_Toys_US&hash=item2a2c2ef3c2

Lego 7741 – The UCS Batmobile

BrickPicker Used Set Price: $107.60

Auction Listing Sold: $152.50 plus calculated shipping ($10)
Percent over BP Price: ((162.50/107.60) -1)*100 = 51%

• Everything included but box
• No extended description
• Explained why selling
• Says Mint-Condition
• Says how shipped (disassembled)
• Not an Ebay store
• Pictures of separated piece and instructions – also shows pieces fully separated
• No mention of shipping or insurance
• No mention if smoke free
• Low number of feedback
• Ended 1:00PM on Friday

http://www.ebay.com/itm/Lego-Batman-The-Batmobile-Ultimate-Collectors-Edition-7784-/230966063631?pt=Building_Toys_US&hash=item35c6a6720f

BIN Listing Sold: $149.95 plus $18.95 shipping
Percent over BP Price: ((168.90/107.60) -1)*100 = 56%

• Everything but box and instructions
• Extended used description
• Says condition good
• Doesn't say how it will be shipped
• Ships insured
• Up close pictures of the item
• No mention of smoke free
• Alludes to the fact they insure it
• Ebay store
• Colorful
• Mentions rules
• High feedback

http://www.ebay.com/itm/Lego-Batman-Super-Hero-Ultimate-Collectors-Edition-7784-THE-BATMOBILE-Complete-/300882925933?pt=Building_Toys_US&hash=item460e05196d

Analysis

There is a lot of raw data here, but we can definitely come to a few conclusions based on the data collected as well as some educated guesses for how an Ebay Auction for a used set should be created. I tried to pull the same types of things out of each listing that I felt “made” the listing or were uncommon in normal listings and put the data together so we can go through each and figure out how much it really affects the price. These are the following:

• Completeness: Everything included along with the instructions and Box?
• Extended Description in the condition field
• How it is shipped: In bags, disassembled, assembled, etc.
• If the listing explains why they are getting rid of it.
• If they offer a detailed description of the item.
• If it comes from an Ebay store
• If they discuss their shipping at all and offer insurance.
• Detailed Pictures of the item itself
• Smoke free home?
• If the listing is colorful and decorated
• If they mention rules: Payment rules, bidding rules, etc.
• High Feedback score and percent. (Score is how many they have, percent is how positive)

Completeness

The implications here are pretty obvious, so we probably didn't need a whole lot of info here, but we do have a few interesting points. In the auctions, there were 3 that didn't include the box. This suggests that, while it certainly helps to have the box, don't assume you can't get top dollar for your item just because you don't have it. If you go above and beyond in other sections, this wont be a dark spot on your listing.

Looking at the data for the BIN listings, you actually see some that don't have the box and one doesn't have the instructions as well. This suggests that BIN is more impulsive so making a good listing of that type may not matter if you get lucky enough that someone clicks that beautiful BIN button.

Verdict: Not a deal breaker

Extended Description

The data suggests this doesn't make a difference for auctions as none of them have it. A few have it in the BIN section, but this doesn't seem to really matter there either, as it was only in 2 of the listings.

Verdict: Don't waste time on it, though it wont hurt you.

Describing how you are shipping it

In the auctions, everyone of them mentioned how they were shipping it. 4 said in separated bags, where as 2 just mentioned it would be disassembled. In the BIN listings, half of them mentioned it would be in separated bags, but the other half mentioned nothing at all. To me, the biggest take-away from all this was that none of the listings that were included mentioned the item being sent still assembled. Most people buying used sets want to build them and don't want to receive them already together.

Verdict: Disassemble your used set and put it in separated bags.

Why are you selling it?

4 of the 10 listings mentioned a short sentence about this, ranging from “we don't have room for it”, to “it has been in storage”. Nothing really definitive here, but sometimes I think it helps people understand why your selling something when they are trying to buy it. I don't necessarily like saying something negative about the set like “Its too big”, but just mentioning that you don't need it, or you need to make some space wont hurt anything.

Verdict: Add something small. It may make the buyers feel a little more comfortable.

Detailed Description

The descriptions of these listings ranged from a few words to being very detailed. I think most of us would agree a detailed listing is really important, but a few of these didn't have much except “Complete, display set”. This makes it a little less important than I thought.

Verdict: Important to have something, but past a few words not a huge benefit.

Ebay Store

I included this one just to see if people preferred to buy from an Ebay store or not. As for the Auctions, only one was an Ebay Store. As for as the BIN listings, half of them were from Ebay stores. That's not necessarily that surprising since most Ebay stores prefer BIN.

Verdict: Ebay stores don't seem to make a big difference.

Shipping Details/Insurance

My feelings on this before looking at the data were that describing how you were shipping and shipping it with insurance could really help your listing. After looking at the listings it seems almost half of them did that. This probably means that while its not a requirement, it definitely can help. I would say around 20% of the people on Ebay ship with insurance, but 5 of these listings mentioned it so it seems more of the better listings on Ebay include this. Plus if you use it, you will save your butt in one of those times where the post office decides to lose your package.

Verdict: Ship it with insurance and describe how well your packing it and mention that it's shipped with insurance in the listing. It's a win-win.

Pictures

The takeaway from this section is: If you aren't going to use detailed pictures of your used set, you aren't going to get top dollar. Now, there was one BIN that used a stock picture, but chances are that person just got lucky. I think this proves that you are throwing away money if you don't take your cell phone or digital camera and just snap a few extra pictures.

Verdict: Take the time to take some good detailed pictures.

Smoke-Free Home Exactly half of the listings mentioned they were smoke-free homes. I am not going to pay as much attention to the BIN since it only takes one person to buy. So looking at the auctions only, I see 4 of them mentioned that they were smoke-free homes. While leaving this out probably doesn't hurt your auction, mentioning it (assuming its true) takes just a few words and it will only help to assure your buyer, along with details about the condition, that its in good shape and that your a caring seller. I know I wouldn't decline to buy something just because they did not have smoke-free in the listing.

Verdict: As long as it's true, mention it.

Colorful Listing

This is probably the thing I was least sure about when I started looking at listings. I generally don't care what the listing looks like – I am just worried about the product. However, I am just one person and not everyone shares my same opinion. I think a colorful listing can only help, but it takes time to get this right.

Only 1 of the auctions had colorful listings. This seems to point to the fact that people care more about the product and the actual words in the description and the pictures you present. In the BIN listings, half of them had this because they were from Ebay Stores. I think this does help a slight bit for BIN because when people are about to take that leap of faith and purchase an item with a click rather than just bid. So a colorful, decorated listing probably helps your listing look a bit more professional.

Verdict: For an auction, its not worth it unless you have set up a template earlier. In a BIN it can probably help, but may not make too much difference.

Mentioning Rules

This is a section I didn't think about until I actually saw the listings. Once I read a few that had some listings about how people have to pay, how they need to bid, etc. I thought it made the seller sound more professional and much more serious when they have it.

However, only two of the auctions had it, so it definitely wasn't a deal breaker. Half of the BIN listings had it, but I think that goes back to the fact that BIN is a little different and the buyer is taking a leap of faith. So here, the more professional you sound, the better chance your listing has of selling in a BIN situation.

Verdict: It's probably not worth it for an auction. However, for a BIN it may create a better sense of professionalism in your listing.

High Feedback

Obviously you can't control your feedback score more than just selling items and getting positive feedback. But I wondered if it required high feedback scores (percentage and number) to make the most money. The answer seems to be “no”. Half of the auctions were listed by a seller with low feedback (< 200). What's even more telling, is that one of them only had a feedback score of 4, and still got top price. I think this means that customer's don't pay that much attention to the number of feedback.

I did notice that most of the feedback percentage scores were 99.5%. So that might suggest that the percentage matters a lot more, but its pretty difficult to have lower than ~98% feedback on Ebay unless you scam people, so it doesn’t tell us a whole lot.

All but one of the BIN listings was by a seller with high feedback. I think this makes sense because, again, the buyer is taking a chance on the seller by clicking BIN. So they are probably more aware of the seller's feedback.

Verdict: Don't worry about your feedback score unless the percentage is really low.

Auction End Times

I was a little curious about this, and will be looking at it later in another article. Most people feel that an auction that ends on the weekend is better. The data here shows half of them did, but the other half were during the week so this seems inconclusive.

However, none of them ended in the morning, so I think its safe to say people don't like to wake up early to bid on auctions .

Verdict: Jury is still out, but don't end your auction in the morning.

Further Analysis and Conclusions

When I sat out to look a this, I thought we would see listings that got 20-25% more. But incredibly, we saw all of the top listings but the Grand Carousel hitting 40-50% higher than the average that comes from Ebay. This is incredible and really makes me rethink how I list used sets. There is a ton of money out there in Legos, as we know, but this just shows how much a good listing makes a big difference in your final price.

Another thing we can surmise is that a good listing works just as well with an Auction as BIN. Definitely with an Auction you are taking a chance, but BIN generally may sit around a lot longer if you list it for 30-40% more than the BP used price. The BIN listings averaged 45.5% over the BP used price and the auctions averaged 46.55% over the BP used price. So you can get more for your auction (Up to 80% evidently on the smaller star destroyer), but your listing doesn't have to be quite as good to sell with BIN – you just need some luck with a buyer.

So why was the Grand Carousel much lower than the others? Well, I decided to calculate the BP used price/BP New price to find out where it was at:

• 10030 Star Destroyer 57% of new
• 10143 Death Star 2 49% of new
• 10196 Grand Carousel 67% of new
• 10217 Diagon Alley 79% of new
• 6211 Star Destroyer 46% of new
• 7781 UCS Batmobile 43% of new

Looking at this data, the Diagon Alley and Carousel have used prices that are very high compared to the new price. I think this definitely had an effect on the Grand Carousel. If the used price gets too high, its going to hit the New price ceiling and people will just buy new.

But why didn't Diagon Alley see the same results? - Well it is a more recent set and cost's a lot less money so I think this shows people are willing to spend a higher percentage on a set that costs less.

So there is all the data. What conclusions do you all draw from this? What do you think could be done to make this data more conclusive? Put your thoughts in the comments!

Note: All of the information here are my own opinions and are pulled from my experiences. You may or may not have success with these methods.

Ever since a Lego store opened in my area, I have been fascinated with the concept of Pick A Brick (PAB) cups. The clear cups, coming in two sizes, offer the customer with the ability to not only choose what they want from a wall of different elements, but also how much they want through packing methods that have been refined over time.

As years went by, my ability to fill every nook and cranny grew. My collection of empty cups grew. And my interest in the cups as investment tools grew as well. Once I realized that the cups offered people with ways to purchase bricks for extremely cheap Parts Per Piece (PPP) ratios, I saw that the cups could lead to excellent investment returns. The following is the result of my investigation into the cups and whether they pack an ideal investing punch.

The Large Cup vs. the Small Cup
Currently, most Lego stores sell two types of cups. There is the small cup, which retails for $7.99 USD, and the larger cup, which retails for $14.99 USD. Obviously, most people believe instantly that bigger is better value, but is that the truth? I conducted a volume test to make sure.

Upon first site, the only noticeable difference between the two sizes other than their height was that the small cup has a wider ring along the bottom of the cup.

For the test, I calculated the volume of each cup and the lid, by filling each container until full with water and then pouring that water into a liquid measuring cup. My unit of measurement for this test is the Milliliter (mL), which I believe provides a more accurate measurement (a Milliliter is equal to 1 cm cubed). However, I have also translated the values to their approximate imperial cup equivalents for universal understanding.

The results displayed on the chart show that the large cup is indeed a slightly better value than the small cup (at no lid, it is 0.28 cents cheaper per mL). This is also good since the smaller cup can’t fit some of the longer elements, such as large plates. I included the differences between lid attached, and lid barely touching the rim because I have found generally, Lego employees are very lenient and if the lid isn’t on, will even provide tape so you can close it with it only touching at one point. Overall, the results of this test mean that it is more economical to pack your pieces into the larger cup, assuming you can pack the big ones just as good as the small ones.

How to Maximize Cup Space
There are several methods to packing parts into your cup. As the cups are cylindrical rather than square or rectangular with 90 degree angles, it is difficult to maximize cup space. This is where all the interesting methods come in. Generally, I would say that packing a small cup is much easier than packing a large cup because it is easier to get your hand into. When packing a Pick A Brick cup, the main objective is to place elements in a way that leaves very few air pockets. Unfortunately, dumping bricks into a cup and shaking it every once in a while still leaves lots of wasted space. In the following section, I will explore the four most popular methods of packing, and see how they fare against each other.

Method 1: Dumping
This method of packing involves pouring bricks down into the cup with no strategy and little to no brick placement. This method is not desirable when packing bricks/plates bigger than 1x2, as it leaves lots of air space in the cup, and the brick placement is random so does not follow the circular curves of the cup.

Bottom Line: good for packing irregular-shaped small pieces or when you are in a rush. I highly recommend against using this method with large bricks, as it wastes lots of space.

Method 2: Central Tower(s)
The central tower method is my personal preference, because it allows you to pack in bricks and irregular pieces without consuming as much time as level packing or circular placement. Basically, this technique involves creating a square tower that grows in size as it reaches the top of the cup, surrounded by smaller pieces or plates that fill in the curved spaces. You can also use this method by making multiple stacks or towers of pieces.

Bottom Line: this method is great if you want a variety of bricks or plates (placed in the “tower) and irregular parts. Plus, it is less time consuming compared to the following two methods.

A partially complete cup packed using the central tower method.

Method 3: Level Packing
Level packing involves making multiple levels of bricks in a circular shape, before putting them into the cup. Generally, the “levels” of bricks grow in size to match the growing width of the cup. This method was made famous by the YouTube video claiming “pack 169 2x4 bricks into a PAB cup” (link below). This method can be time consuming and it is best to practice at home before trying it at the Lego store.
Bottom Line: level packing is a great way to pack a large amount of larger bricks (2x3, 2x4 etc). However, the method is difficult if you aren’t already familiar with the level dimensions you are using.

Link: Pack 169 2x4 Bricks into a PAB Cup (a example of Level Packing)

Method 4: Circular Placement
The last, and arguably most difficult method, is what I call circular placement. Usually used to pack 1x2 or similar bricks, the method involves carefully arranging the bricks into circle-based formations to maximize space. The bricks are seldom connected and this method is very hard and frustrating. If you aren’t good at reaching into small spaces and gently placing bricks, stay away from this method. I have pasted a link to an example of this method below.

Bottom Line: only use this method if you are packing small bricks and have lot of time. Do not use this method if you have difficulty doing small, intricate tasks.

Link: Example of the Circular Placement Method
http://www.flickr.com/photos/notenoughbricks/4910234440/in/photostream/

Extras: Lids, Rings, Tips and Tricks
In addition to the basic methods, there are several tips and tricks that I use to squeeze in a couple extra bricks. Here is a list of them:

• The Lid: the lid of the cup will sit in different places, depending on how many bricks you packed in. However, no matter how full the cup is, there is always the same amount of room in the “stud” of the lid; the cylindrical part that sticks out. Always fill this up, whether it is with 2x4 bricks or 1x1 plates. Remember: wasted space is wasted money.
• The Ring: as you may or may not have noticed, the cups have a small ring on the bottom encircling the circumference of the cup. This allows the cups to be stacked with the stud. To make use of this area, I usually fill it with sideways 1x2 bricks, resulting in an extra 18 bricks in a large cup.
• Containers: If you are including barrels or stoves in your Pick A Brick cup, be sure to slip pieces into them. You can also use this trick for small windows by placing them facing away from each other, and then inserting a brick in between them.
• Sales: As with most items in the Lego store, Pick A Brick Cups rarely go on sale. However, they have been known to be included in promotions such as “buy a large cup for the price of a small”, or just the regular 2x the VIP points promo.
• Other Methods: some Lego stores sell their Pick A Brick stock by the pound. I generally would discourage this as it is much more expensive unless you are buying large, rare parts. Also, some Lego stores offer boxes for $70. These boxes are the boxes that the pieces came in, so you only get one piece and it is pre-packed. However, these boxes are still a good value, especially since they feature 90 degree angles. Lastly, we have the Holiday PAB boxes, which are given out with special purchases. Use these boxes wisely, as the corners are straight and allow for easy packing.

So which method is the best? Ultimately, other than the first method, all make good use of the space, so it depends on your time and what pieces you are packing. But, since I know you all love charts and numbers, here is how the different methods compare when packing 1x2 or 2x4 bricks. Keep in mind that some methods (like the central tower method) are meant to be used with a specific combination of pieces so this isn’t the most accurate representation of how they work, and that I made it so the lid is touching in one place at least. I did my best to accurately replicate each method, keeping within a half-hour packing timeframe for each to model the amount of time you might have in a store.

The chart shows that the last three methods are all very successful, and any of them can be used to efficiently pack bricks. If you use the level packing method and pack in 695 pieces like I did, then you will end up paying 2.15 cents per piece. That is about the best deal you find on new Lego, period.

Scoping Out Useful Pieces
Whether you are planning on buying a Pick A Brick Cup for yourself or to invest in, it is important to know where the good pieces are located. You can drive to different Lego stores to check them out, but it would be preferred, especially if travel distances are long, to check them remotely.

The two ways to check the selection of a stores Pick A Brick wall are to call the store and ask them, or to use the website Brickbuildr. Brickbuildr is a user dependant site where visitors to Pick A Brick walls can input what was there and when for other people to see. While I have found the information to be generally reliable if new, the site is not free of inconsistencies. Lastly, always make sure to ask a Lego employee if they have any elements that aren’t on the wall. Usually, they are very helpful and may even take you into the back to look for other pieces.

Scoping out the right piece is very useful if you are strategically planning a PAB haul to maximize profits. Knowing ahead of time what is on the wall can allow you to research the value of the pieces to determine which will lead to the best profits.

Link: Brickbuildr:
http://www.brickbuildr.com/view/pab/

Investment Returns
When you can pack in the elements for such low PPP ratios, the investment potential for PAB pieces is huge. By using a part-out website such as Bricklink, you can sell the pieces as individuals. This may sound tedious, and it isn’t for everyone, but since the stock can be purchased at minimal pricing it is quite profitable.

The pieces I have chosen for my investment returns chart are all pieces that I myself have purchased from a Pick A Brick wall. As I earlier concluded that large cups are better than small ones, everything is based off if the elements were packed into a large cup. Unless otherwise stated, my approximate piece counts are based off my previous estimates using the best result and my theory of one stud volume. Basically, one stud volume says that a 1x1 plate is half the size of a 1x2 plate, a third of the size of a 1x1 brick and so forth. Obviously, this theory is proven (a plate is a third the height of a brick), and is a cautious estimator because generally the smaller a piece goes, it can pack more one stud volume into a cup.

The chart shows two things. One, smaller elements are much more profitable than larger ones based off the sheer number that you can pack into a cup. Two, Pick A Brick investing can be extremely profitable. Now before everyone runs off to buy up all the tiny pieces at their Lego store, remember that selling even one cup’s worth of pieces can take a long time, and to move stock faster you will have to lower prices. If you already part out sets, than you should seriously consider starting to invest in Pick A Brick cups.

Selling pieces for a profit of 160 dollars is unprecedented when the stock cost you $14.99. Plus, I haven’t seen or heard much of PAB elements being used for resale on Bricklink so as of right now, there is little competition. Pick A Brick cups give part out investors a fresh and cheap source to an already thriving market. For that reason, their investment potential is massive.

In conclusion, Pick A Brick cups offer great PPP ratios if you can pack them right, and a decent ones even if you don’t. Whether they offer a profit-pouring punch really depends on investor; if you already work with Bricklink you will enjoy spectacular profits, if you don’t, I suggest you dabble before taking the time and space to start a Bricklink store. But one thing is for sure. Packing a PAB cup is fun, challenging, and the rewarding contents will leave you smiling.

]

Will box damage reduce the value of my sets when it is time to sell them?

We have all asked ourselves this question at some point, and it is actually seen on the forums relatively often, so I think it is time to evaluate a little more in depth how much does box condition really matter for the LEGO investor once it is time to get rid of some of those sets we have stored in our closets (or whole rooms, if you are lucky).

There are very different types of damage to consider, ranging from the typical small creased corner, passing through the 2cm puncture, to the the run of the mill completely trashed box. It has been my personal experience that most of these does not really matter much when it comes the time to sell the sets, mostly due to the fact that the large majority of people who buy LEGO in the secondary market do so to build them instead of as an investment, and as a result most of them have absolutely no use for an empty box. However, I will take a more objective approach in this article and find actual examples of sets sold over the past two months on eBay with different levels of box damage and try to compare to the same sets in MISB condition. This comparison will really give us a pretty good idea about how justified are the worries of some investors regarding the condition of their boxes.

Let's see some examples and compare the prices each auction ended up selling for against each other as well as Brickpicker's Price Guide (New). Again, this are all SOLD listings.

Example 1: Quidditch Match 4737 (BIN)

Example 2: Ninjago Ultra Sonic Raider 9449 (Auction Style)

Example 3: Dino 5888 Ocean Interceptor (BIN) 6 copies, same damage.

Example 4: Heartlake Vet 3188 (BIN) 5 sold sets

Example 5: B-Wing 10227 (Auction Style)

So far, this have all been relatively cheap or even still available in stores, let's see some examples of more expensive retired sets.

Example 6: Boeing 787 Dreamliner 10177 (BIN)

Example 7: Grand Carousel 10196 (BIN) The seller did not have a picture of the damage, but in his description he notes: "Box had other boxes stored on top and the set box is mashed in on the top and one corner. The damage is not all that bad but if you are looking for a pristine box then do not buy this one."

*There is one sold listing for around $1,700 included in the mean. Example 8: Cafe Corner 10182 (Auction Style)

Apparently, there is now way for me to go back more than 60 days of my own sold listings so I won't be able to actually place the pictures in here of my own personal damaged box sales, but I can at least tell you about some of them

Example 9: Hogwarts Express 4841 (BIN) Completely trashed box, dented, crushed, creases everywhere.

Example 10: Imperial Shuttle 10212 (BIN) This one was way back when the price was hovering around $ 320 (Feb-Mar). Sold two in a week, one MISB one damaged for the exact same price. (Price guide value from Mar 13)

Now that you have seen first hand the real impact box damage has on the value of your sets, I would like to leave you with some comments.

First of all, it is very important you take into consideration that most of the time a set with box damage will end up being significantly cheaper for you as an investor than one that is MISB. For example, on the recent Amazon Haunted House and AA sale a few weeks back several members, including myself, received boxes in bad shape. I can't tell you what some of the others did, but I did contact Amazon who suggested sending me a replacement for the set at the same price, or that I kept the set for a discount that ended up being $ 36, bringing the set down to around $ 100!. This is not something uncommon when dealing with Amazon, as most of the time they prefer to discount a significant percentage of the price instead of going over all the hassle and cost that involves getting a set back from a customer and issuing a replacement. This is not unique to Amazon, however, as you will probably get the same treatment by customer oriented sellers with great reputations on eBay and even with some of the other major retailers.

Another thing that you have to consider relates to when you actually decide to sell the damaged box set. If you are listing on eBay you are better served by making very obvious that your item comes damaged both in the title and in the description. This is one of those cases were you don't want to downplay the level of damage your box presents in hopes of getting more money, as the buyer could very well ask for a refund/discount or even file a SNAD (Significantly Not As Described) case, in which case the probabilities of you losing both the set and the money are relatively high.

So, when selling sets with damaged packaging I suggest including something to the effects of *DAMAGED BOX* in the title and then once again in the description with a more detailed explanation. Of course, you also need to add several images showing every single crease or imperfection, for those buyers who just don't like to read the descriptions. Even then, you might get some complaints, but that is true of pretty much every listing. If you are really worried about this though, you can even message the buyer before shipping to confirm he knows he is getting a "damaged" item.

Finally, when selling these type of product (I would say always, even) use the Buy It Now format. By listing the price you want, as long as it is realistic, you will pretty much secure exactly the amount you are expecting. The special problem with listing damaged boxes in auction format is that you don't know if the buyer you are looking for will come during the 7 days your item will be listed for sale. With BIN you will have plenty of time to get a buyer who is not really interested in the box at all to purchase your item. If you want to see cases in which box condition does seem to have an impact, it will almost always be in auction style listings.

Those are the three major factors to consider when investing in damaged boxes. As with anything, there are pros and cons, but I consider that in this case the benefits (discounts on price / higher profits) outweigh the costs (more time listing / somewhat higher risk).

One last thing I would like to mention relates to highly collectable items, like a 1st Edition 10179 or similar sets. In those rare cases you are in fact better served to secure a MISB set in order to maximize your profits when it comes to sell it. Having said that, there are really not that many sets that would fall into this category.

I hope I have put some of your concerns to rest when it comes to holding onto those damaged boxes. As you could see yourself, most of the time the impact they have on your profits is negligible and certainly well less than what you usually get in the form of discounts when originally purchased.

Thanks for reading.

*Whether your item sells or not will also depend on your feedback and listing terms. I know this is pretty obvious, but wanted to include this note just in case.

When I was a kid, I remember my younger brother wanted to be involved in everything I was. When I got a bike for my birthday, he wanted one. If I went to summer camp, he wanted to go, too. If I was hanging out with my buddies, he was tagging along behind us. As I’ve grown older and seen my kids behave similarly, I have come to understand that’s the nature of siblings. The younger ones look up to and emulate their elder siblings.

In the wonderful world of Lego, the older brother is growing up: Ninjago, the explosively popular theme that debuted in 2012 is set to return in 2014 after a brief hiatus. Lego originally announced that holiday 2012 would be the final Ninjago release before retirement, allowing little brother, Legends of Chima, to claim the spotlight. Yet, late last year, Lego announced on a message board that Ninjago would be rereleased in 2014, elbowing little brother Chima to the back of a crowded pre-teen market segment.

Ninjago’s runaway success was based upon appealing, detailed sets being marketed better than any theme before. Lego’s primary marketing vehicle was the smash television series: Ninjago: Masters of Spinjitsu. Ninjago took Cartoon Network by storm, and by its final second season episode amassed a domestic viewership of almost 3.5 million, good for the highest rating on US cable television in its time slot. The Ninjago product line also included the hot-selling “Spinners”, a supplemental game within the theme that pit Ninja minifigs in simulated combat against their skeleton foes. In two short years, Ninjago went from four ninjas training in a dojo to one of Lego’s top three selling themes.

Sometime during Ninjago’s ascent, Lego decided to shelve after a three year run in accordance with their typical theme strategy. To fill the void left by the wildly popular Ninjago, Lego created Legends of Chima, a theme built around a society of sentient, anthropomorphized animals that quest for Chi, the “life-source” of these advanced creatures. It appears the Chima theme has been in the works for a while, and will utilize a similar product line and marketing strategy to Ninjago that includes kid-appealing animal characters, a television show, and another ancillary “game” that utilizes single wheeled zip-cars called Speedorz. The first wave of Chima sets was released in early 2013, with a plan to ramp up with a second release of sets and the television show in mid-2013.

With Chima poised to become Lego’s lead offering to the pre-teen market segment, Lego decided to change tack by reintroducing the recently retired Ninjago theme at the beginning of 2014. While Ninjago fans rejoiced, this created some uncertainty for the Chima theme. The obvious, major concern was that a new Ninjago release could cannibalize Chima’s nascent sales, and possibly kill the theme all together. However, with the few dribbles of 2014 Ninjago information coming out, it appears there may be room for both Chima and Ninjago. The first rumor to emerge is that Ninjago’s new release will ditch the snake villains for an enemy that elevates the Ninjago conflict to more mature viewers: evil robots. As evidenced in the poster released by Lego shown below, the introspective, oddball ninja Zane may discover the source of his social discomfort: it appears he may actually be a robot!

The poster also shows some type of robot in the shadow of Zane’s mechanized ocular orb, perhaps a reflection of the future struggle for Zane, or a robotic enemy that awaits the Spinjitsu masters.

Needless to say, adding robots points to more complex storylines and more mature and nuanced characters. Think of the Terminator series, or the Borg from Star Trek The Next Generation. Both have very frightening Armageddon-type storylines with villains that show little human emotion or qualities. With this turn, Ninjago will begin to encroach on science fiction that typically appeals to an older demographic. The departure from a historical context to a science fiction platform allows Ninjago to follow their core fan group that are growing out of the younger, pre-teen market segment. Ninjago’s changes also create a void in one of Lego’s target market segments that I expect Legends of Chima to fill. Our Chi-loving animal friends should fit the demographic gap vacated by Ninjago quite nicely and allow Lego to dominate both of these crucial market segments and bridge the gap to teen and adult themes like Lord of the Rings/The Hobbit.

What effect will this new market segmentation have on investors’ strategies for these themes? For one, retired Ninjago sets should continue to be profitable, and will likely get a boost with new episodes airing sometime in 2014. Any investors with Epic Dragon Battle, Fire Temple, and Destiny’s Bounty sets must consider stashing a few of these away for another year in anticipation of the Ninjago buzz coming in 2014. The new Ninjago release should open up new investment options in a year as well. Per BrickShow News, the Hungarian Blog Kockamania http://www.kockamania.hu/ claims to know the new Ninjago set names, and have leaked them as follows:

LEGO 70720 -- Air Breaks (Hover Hunter)
LEGO 70721 -- Kai fighter (Fighter Kai)
LEGO 70722 -- OverBorg attack (OverBorg Attack)
LEGO 70723 -- Thunder offensive (Thunder Raider)
LEGO 70724 -- NinjaCopter (NinjaCopter)
LEGO 70725 -- Nindroid mechanical dragon (Nindroid MechDragon)
LEGO 70726 -- Destroyers (Destructoid)

Investors will be drooling over the release of 70725 Nindroid MechDragon that appears to extend the phenomenally performing Ninjago dragon line, and with Ninjago sets typically increasing in size within the theme’s number sequence, the dragon appears to be one of the larger sets of the theme.

As for Chima, Ninjago’s reentry into the Lego catalog still could stunt its popularity as a theme despite Ninjago’s older market segment. The good news for Chima is that it has another seven months to launch the television show, and to introduce a newer, stronger wave of sets that includes the dramatic 70010 Lion Chi Temple and the gritty 70014 Croc Swamp Hideout, both anchor sets of rival tribes. On the downside, Ninjago could still steal some of the 5-9 year old demographic from Chima even if Ninjago is geared toward a more mature audience. As we all know, little brothers still like to tread on the heels of their older brethren. I believe the creativity of the Chima sets, the release of the new anchor sets, and the television show launch still portends popularity for Chima, but its upside may be capped from Ninjago. For those that believe the Ninjago move foretold Lego’s dissatisfaction with the performance of Chima, TLG is still firmly behind Chima, as evidenced by its recent announcement of a new Chima themed area of the water park in Orlando, aptly titled “World of Chima”.

From a performance standpoint, I think Chima theme returns may mirror the Pirates of the Caribbean theme: strong at the low and high price points, but weak among the mid-level sets. Here are the performance graphs of the two PoTC set releases:

First release:

Second release:

These sets are shown in order of size, from largest to smallest piece count. As you can see, both graphs have the shape of an inverted bell curve with the best performing sets on the ends of the size spectrum and the worst performing sets in the middle. If the Chima television show is a success, I believe returns on Chima sets will follow this pattern as well, so look for small sets like Razcal’s Chi Raider and large sets like Cragger’s Command Ship and Lion Chi Temple to perform well, while medium sized sets like Laval’s Royal Fighter, Lenox’s Lion Attack and Eris’ Eagle Interceptor to languish. There’s one caveat to this: if the television show highlights a certain set and makes it iconic, it could very well become the next Ice Dragon.

Only time will tell whether Chima will be a hit on the secondary market, while the established and popular Ninjago theme continues its secondary market gains. As always, retail market popularity will drive secondary market demand, so if the television show continues the popularity of the first three episodes, Chima will have sets that perform well after retirement. While little brothers are usually tag alongs when they’re young, if they learn from their older brethren they can mature into great people. The same holds true for Chima – don’t let this theme pass you by.

Throughout the Golden Age of Baseball, when Mickey Mantle and Willie Mays patrolled the game's outfields, baseball writers and fans used three primary statistics to explain a player's offensive prowess: runs, home runs and RBI. This had been the case for a hundred years, but in 1977 a little known statistician named Bill James produced a magazine called Bill James Baseball Abstract. In it he presented a number of new statistics that more accurately represented how baseball players created or saved runs. As time went on James' Abstracts gained acceptance, and eventually he became the prophet of a new way of measuring baseball statistics called sabermetrics, popularized most recently in the movie Moneyball. Today, many of these sabermetrics have been accepted by the mainstream baseball community and are routinely used when comparing baseball players across generations. Without James, these sabermetrics may never have taken root.

Like baseball junkies, Lego investors also use statistics to estimate the future performance of their investment sets. Among these, the Price Per Piece statistic seems to have caught on as the default metric to assess the "value" of a set. PPP shows up prominently in Brickpicker's very own set review template, asking reviewers to assess the set's PPP for a better understand of the set's value. Its concept is simple: the more bricks a buyer receives for their dollar, the more they "get" for their money. Typically, buyers and investors have used a $.10 per piece benchmark to label sets as good or bad values.

In the context of investing, using PPP to estimate future demand for a given set is at best limiting, and at worst, flat out wrong. In order for PPP to help in measuring future performance, we need to see a correlation between PPP and secondary market performance. Unfortunately, there are hundreds of examples where low Price Per Piece sets don't perform well after retirement, and a similar count of high PPP sets that are phenomenal performers. In my earlier blog, Lego Truths and Myths, I showed how 5525 Amusement Park has a strong PPP ratio of $.052/piece and a dreadful secondary market performance, with a 32% loss from MSRP. Yet in the same theme, 10183 Hobby Trains has a PPP of $.093, with an amazing 135% incredible secondary market gain, while 5526 Skyline has a ridiculously low PPP of $.047 with an even better 144% post-EOL yield. As you can see, there is no correlation between low PPP and high earnings within the Factory theme.

For other themes, the trend continues: here is the performance of a recent, relevant theme, Pirates of the Carribean:
 

For a theme with some pretty similar PPPs, there is a huge difference in post-EOL performance. The takeaway is this: there is NO correlation between PPP and secondary market performance. Demand for a secondary market set is largely determined by other set characteristics, most notably primary market demand and primary market availability. So can PPP be used for anything, or is it a complete strikeout for investors? To answer this, we must determine whether there are secondary market buyers that are price-sensitive, or more willing to buy something if it's priced lower. Here is a simple market segmentation showing the types of secondary market buyers that I presented in a previous blog article:
 

Among the secondary market's two submarkets of AFOLs and parents, there is one market segment that is very price conscious: MOCers. MOCers are AFOLs (Adult Fans of Lego) that design and build their own models referred to as "MOCs", an abbreviation for "My Own Creations". They often require specific colors or unique pieces for their MOCs and will pay what they need to get them. However if there are cheaper, more reliable alternatives, they will use them. In the past, a few bold expert investors have tried to purchase retail sets anticipating the set's pieces will be more desirable than others after the set has retired. To find these sets, most use Bricklink.com, a website with a function that provides the total part-out value of a set based upon the last six months of sales, so comparing the retail PPP against the part-out PPP may provide investors with a good gauge to whether MOCers might pay inflated prices once a set has retired. Here are some randomly selected retail sets with their current part out and retail PPPs:

This table shows us that MOCers would likely pay a premium over retail for 79003 and 79111, but NOT for 9493 and 21008 since their Part out to Retail PPP ratio is significantly lower. Technically, this is a metric that can be calculated without PPP, but translating it to PPP allows meaningful comparison across all types and sizes of sets. When using this new metric, it's important to bear in mind that this Part-out to Retail PPP ratio isn't an assessment of future secondary market performance, only a guess whether MOCers will still purchase sets above retail after retirement. While Burj Khalifa has a terrible ratio, it still may be a winner in the secondary market because of its collectability as part of the Architecture theme. While the Part-out to Retail PPP ratio allows us to think about PPP and investing from a slightly different angle, it will likely never become a meaningful or widely used statistic since it only measures demand from one small segment of the overall secondary market.

There are two other insights from PPP that provide additional information to our beloved Lego universe:

• On average, licensed themes are more expensive on a Price-Per-Piece basis than non-licensed themes. Comparing the average theme PPP among a group of licensed themes could provide a very rough comparison of Lego's licensing costs. We surmise that Star Wars has the highest licensing fees because their sets' PPPs are, on average, higher than others. Comparing the aggregate PPP for a theme would likely show this even better.
• The PPP ratio can also be used by Lego buyers to quickly expand their Lego piece collections by purchasing only low PPP sets. This would apply to a VERY small segment of Lego buyers with a negligible effect on either the primary or secondary market.

While these PPP fun facts are interesting, they aren't particularly illuminating for investors.

We know from our assessment of PPP that there is no correlation between PPP and investment success. Yet, while the best analysis in the world can give you a great chance at making money, the immortal words of Yogi Berra still echo loudly in the relatively immature Lego investment market:

"In theory there is no difference between theory and practice. In practice there is."

If you are determined to use Price Per Piece as part of a systematic approach to investing, you can still make money. As always, invest accordingly.

There is something I have been wanting to apply to LEGO for a long time but that for some reason I could not find enough time to do: a regression analysis.

For those of you that have never heard of have already forgotten what a linear regression is, I will try to quickly summarize the most important aspects. Basically, by running a regression analysis we can determine the relationship between several different independent variables and how they affect one particular dependent variable, therefore allowing us to determine exactly what causes that independent variable to change. Even more, once we have performed a regression analyses we end up with a linear equation that can help us predict the future value of the independent variable by changing one or several of the dependent, with a margin of error depending on the quality of the regression. I know that some will understand this better once we get into the actual UCS numbers.

What I did in this particular case is select a popular theme that had a manageable amount of retired sets so that I would not need to spend several days collecting data, and the UCS seemed to be the most useful choice. For my independent variable I selected Change Over Retail, and the dependent variables that would help me determine it ended up being the following:

• Price Per Piece
• Price Per Gram
• Piece Count
• MSRP
• Total Number of Sets Sold in the Past 12 Months
• Approximate Numbers of Years Retired

There are several other variables that more than likely have an impact in how much a set increases in value over its retail price, like amount of exclusive pieces and actual sales numbers from its entire production run, but they are very hard or even impossible to quantify. The ones I selected are probably the most important of the ones we easily have access to.

After selecting my variables, I went ahead and made a table in Excel for every single one of the UCS already retired sets and collected data for the variables above for each. Here is what it ended up looking like:

You see that there is a lot of information in the table above that will help us with our current analysis. After collecting the data, I proceeded to run the regression analysis using Excel. The following is the regression output.

There are a lot of numbers in the table above, but this is not supposed to be an in depth stats class, so I highlighted one of the most important numbers. The highlighted R Square figure is the number that lets us know how much of the variation in a set's % Change over retail is explained by the variables listed below (PPG,PPP, MSRP, etc). In this particular case, we got an R Square of 0.72, or 72%, meaning that we can explain 72% of the movements in Change over retail by using this model. Why can't we explain more than that? well, it all comes down to not having more sets to include (only 16 have been retired) and the fact that we do not have all the variables that have an effect on a set's change over retail. Still, 72% is a pretty respectable number all things considered.

Now the boring part is out of the way, let's put to use what we found out and see how well our model matches up to the actual Change over retail of each set. This is done by using the following equation gathered from the above output:

Predicted % Change Over Retail =-443 + 2045*(PPP) + 2524*(PPW) + 0.41*(#Pieces) - 3.47*(MSRP) - 0.01*(SetsSold12Mo) + 40.46*(#YearsRetired)

You basically substitute each set's information for each variable in the formula above. For example, the 10179 predicted change over retail would be:

Predicted % Change Over Retail =-443 + 2045*(0.1) + 2524*(0.049) + 0.41*(5195) - 3.47*(500) - 0.01*(342) + 40.46*(3)

Predicted % Change Over Retail = 374.01% Actual Change Over Retail = 424.41%

As said before, there is a margin of error tied to the fact that not all of the variables are accounted for, but for basic estimations this model will give you some decently accurate results most of the time. Keep in mind that some special cases will be farther apart from the actual results, while some will be extremely close.

I then went ahead and applied the formula for every single set and compared the predicted values to the actual values just like we did with 10179 above, here is what it looks like both in table and graph form:

You can see that some of the results are pretty accurate, a couple are very far away (especially Grievous and the Speeder), and most are somewhat close. With more observations (sets) and with at least some of the missing variables our results would be a lot more accurate, but I think this at least provides you with a rough projection of where a set might be once retired for X amount of years.

So, we have been using this model to see how well it predicted performance of sets that have already been retired, but the real usefulness of it is going to be predicting the % change over retail of sets that are currently being produced and sold at retail OR those sets that have already been retired but you want to know where they will be in a couple more years. I will do one example so you can see this better:

10225 R2-D2 Predicted Change Over Retail in 3 Years (Assume retirement this year)

% Change = -443 + 2045*(0.08) + 2524*(0.069) + 0.41*(2127) - 3.47*(180) - 0.01*(676) + 40.46*(3)

Predicted % Change = 244.61%

So, according to the formula, this model should be worth around $ 620 once it has been retired for a period of three years, equivalent to a 244.61% change over retail.

I included this predictor in the Excel file you will find below, but there are some things I want you to keep in mind while using it:

• Projections are not perfect, just estimates
• The model assumes past performance trends will maintain, since that is all the data we have, but as we all know the LEGO investment environment has changed
• Do not try to project values beyond 12 years, since that is the farthest data point we have and will make your results more inaccurate.
• Have Fun!!

Thanks for Reading!

For three years, I worked downtown and on my way home from work I would occasionally pass by a hot dog vendor named Ray who would stake out a corner near the entrance to the train station. Because I'm a sucker for a good Chicago-style dog (tomato, pickle, onions, neon green relish, mustard, celery salt, sport peppers, and NO KETCHUP), I would occasionally stop by Ray's cart for a dog, and he and I would chat for a couple minutes while I finished it. One day, we got around to talking about his business, so I asked him what separated his hot dogs from the cart across the street. At first he gave me a line about how his have magic, so when I challenged him on it he looked at me and said, "You know, there's no difference between mine and his but one thing – my voice. I was blessed with pipes…he wasn't."

"Get your rrrrrrrrrrrrrred hots here!"

thanked Ray for the hot dog and headed home, hearing his "red hots" call echoing off the buildings as I walked toward the train station. On the train home, I pondered Ray and his little business and began to appreciate his simple, effective business model. Essentially, he had two critical components: a location with thousands of potential buyers and an effective sales pitch: his signature call.

"Get your rrrrrrrrrrrred hots here!"

Lego resellers are similar to Ray: both are looking for lots of buyers and a great sales hook. To get buyers, every Lego investor has easy access to "park their cart" on the most prolific market in the world: eBay. Yet to succeed, sellers also need to develop their hook, and the easiest way to do this is by creating an effective eBay listing. Posting effective listings will yield more sales and higher selling prices for the Lego investor. With these tips, the beginner Lego reseller will maximize returns on all their eBay listings.

Lego Listing's Key Ingredients
Let's say a new Lego investor purchased 10228 Haunted House around Christmas last year at a shockingly steep discount and now, to free up some capital, has decided to sell it. What's the best thing he can do to maximize return on your sale? Write a great listing! Fortunately, eBay wants to help you list your merchandise, so they have created two tools to help sellers complete their listings: the quick listing tool and advanced tool. The quick listing tool is a guided process that prompts sellers for specific information, while the advanced tool is a self-guided process that provides the seller more options to customize the listing's information. For new sellers, I would suggest using the quick listing tool for the first few sales to develop a familiarity with the listing process. The advanced tool can always be used for future listings once the new seller is comfortable with the format.

For now, we will discuss the quick listing tool. The quick listing tool includes four steps:

• Describing the product
• Setting the price
• Selecting the shipping options
• Reviewing the listing

Each has its own considerations and challenges, so here is a description of each:

Describing the Product
There are three main areas that must receive special attention when describing your merchandise in a listing:

• Listing Title
• Product Category
• Photographs
• Product Description

Listing Title
The listing title is the first input a seller must make when crafting a listing. This title is important because most eBay buyers use eBay's search engine to find merchandise, and this search engine searches only for words in listing titles. A well written listing title will increase views of your product, and the more buyers look at your product, the higher the probability that someone will bid on it. The listing title is limited to 80 characters including spaces, so the title must be condensed, accurate and informative. For Lego selling, follow these simple rules:

• Assuming you are selling a Lego brand product, always include LEGO at the beginning of your title without exception.
• If selling a Lego set, always include the set number, name and theme and the term "set". Try to avoid abbreviating the name and never miss including the number.
• If selling a group of Lego bricks, always include "lot" in the name and the defining characteristic of the lot. For example, if you're selling a collection of tree pieces, include "Lego lot tree pieces" in your listing title.
• If selling minifigs, always list the fig name if there is one, the term "minifigure", and the number and name of the set it came from.
• If parting out a set, be sure to list the set number and name, and what is missing or parted out. For example, if you're selling the dragon only from 70503 Golden Dragon, including the phrase "Dragon figure only" in your title will bring you the best chance of hitting your target buyer. If you're selling Bag-End with no minifigures from 79003 An Unexpected Gathering, be sure to include "no minifigs" in your description. If the set comes with everything but the box, include "no box" in your description.
• If there's room, always provide the condition of the set or part. Common modifiers include:

• MISB: Mint in Sealed Box – appropriate if the box is flawless
• NISB: New in Sealed Box – appropriate if the box is sealed, but there are flaws in the box such as folds, crush marks or wrinkles. This note is not appropriate if the box is open in any way, or if the original seals aren't in their original condition.
• New - appropriate for pieces being parted out that haven't been assembled.
• Gently Used – appropriate if pieces or set has been assembled once and all pieces are in good shape

Here is an example of a strong listing title:

If there are still available characters in your description, it will help your Lego listing if you provide other descriptive words. For the 10228 Haunted House, adding additional appropriate descriptors like "vampire" or "mansion" in your title will give your listing extra hooks for the search engine:

Lego 10228 Haunted House Monster Fighters MISB vampire mansion

Also, I suggest NOT using hyphens in your titles since they tend to be wasted characters. If you feel like you really need to use them, separate the hyphens with spaces. The listing title "Lego 10228 Haunted House-Monster Fighters-MISB-mansion" may not provide a match with any of the individual search words "house", "monster", "fighters", "misb" or "mansion" since the search will read the hyphenate phrase as one word.

There is also a subtitle option available to add to your listing for an additional $.55. This subtitle will not be searched for keywords by eBay's search engine so I don't see a lot of use for this, especially for commodity-type listings like lots and common minifigs. Returns from low cost listings will also suffer from this additional fee, so it's not worth using this feature for small sets either. I suggest keeping the $.55.

Product Category
The product category is also a small, yet important piece of information to provide for your listing. For buyers that don't use the search engine, the only other way to find a listing is to navigate eBay's product categories. The eBay product category database is an entire hierarchy of categories and subcategories that can quickly refine a search without keyword input. As you may have guessed, there is a "Lego" product category that is a subcategory of the "Toys and Hobbies" category and "Building Toys" subcategory. The Lego subcategory is also segregated into a variety of themes including Bionicle, Technic, Duplo, Mindstorms, Lego sets, and an all-encompassing "Other" category. It's important to provide the most applicable subcategory since the listing will show up in all the categories and subcategories that are marked. For example, a 10228 Haunted House set that is only labeled in the "Lego" category will only show up in a Lego category search, while the same set that is labeled with the "Lego" category, "Sets" and "Other" subcategories will show up in all three category searches. Fortunately, eBay quick listing tool will suggest categories/subcategories if you enter the set number and name when prompted.
I have circled an example of a strong Product Category selection:

EBay will also offer the option to list your Lego product in a second category, but I wouldn't recommend spending the money as most Lego merchandise will almost always fit into a specific subcategory.

Photographs
Like a good bun to a hot dog, a good photograph will really complement your listing's text. There have been many discussions on the Brickpicker forum about buyer frustration from getting stock photographs with listings. While Power Sellers can leverage their track records to establish a buyer's trust, the new Lego investor must use all tools in his arsenal to establish buyer's trust. Posting pictures of the actual set is a way to prove the condition of the merchandise and establish that buyer trust crucial for getting a bid. EBay allows sellers to post up to 12 pictures, so always start with a general shot of the box, and use the remaining pictures to establish box condition or to show the assembled set if selling used.
When taking pictures, be sure to provide enough light while avoiding glare on the box. Also, always use a light background (a sheet can work in a pinch), and as Brickpicker members have seen, never use the bathroom as a setting for your photographs! Finally, avoid confusing pictures such as this one:
 

This picture confuses the buyer, mixing a stock black and white photo from a different set with the actual set in bag and assembled form.

Product Description
The product description is probably the most crucial part of the Lego listing. While a good title and a targeted subcategory label will bring in the potential buyers, the product description will sell a product. The Product Description is the only place to provide specific details of the Lego merchandise being sold, and the more information that is provided to potential buyers, the better a chance there is for a bid. All descriptions should be written conversationally, and have a positive tone. If you are proficient in HTML, you can add graphics and backgrounds to your listings, but don't feel pressured to provide this, especially if it's outside your comfort level or skill set. If you elect to use graphics, keep them clean and minimal.
The best Product Descriptions include the following four sections:

• Introduction
• Lego S@H Description
• Listing Specific Information
• Personal Touch

Introduction
The introduction should introduce the buyer to what you are selling. It's important to make an impression, so make it fun and keep it light, but always include the quantity, set number and name, piece count and a quick description of the model and its highlights. For our 10228 Haunted House example, something like this would work well: "The_lego_closet presents Lego 10228 Haunted House – a frightfully wonderful building model that will have you screaming for more! This 2,064 piece Lego set is an old, rundown Victorian mansion that's been haunted by a vampire, his bride, zombie assistants and even a ghost! The Lego model house swings open to show the scary contents of this vampire couple's home including a variety of rooms, spooky accessories, furniture, and a fireplace among other delightfully ghoulish details."

Lego S@H description
For Lego sellers, the actual Lego description provides a wealth of knowledge, and should always be included in the product description if it's available. Brickset.com has Lego's description listed under their "Descriptions" tab for each set's information page, so always check Brickpicker for this copy. For 10228, the copy is:

Lego's Description for 10228 Haunted House

"Enter the haunted house at your peril!

The crooked Haunted House is home to the scariest ghosts and monsters. Tremble in fear as you open the gate, go weak at the knees as you step onto the porch and gasp in horror at the fireplace, kitchen, office, folding staircase, bedroom, potion room, music room and collection of other creepy objects. Dare you enter the Haunted House?!

Add to your LEGO® Monster Fights Collection with the first officlal LEGO® Haunted House!

Includes 6 minifigures: 2 glow-in-the-dark ghosts, Vampyre, Vampyre's Bride, Zombie chef and butler

Features unique ‘crooked' design featuring boarded up windows and working front gate.

Haunted House opens to reveal detailed interior with 3 floors.

First floor features fireplace that swings open and displays a ship in a bottle on the mantle.

Cook up a ghoulish meal with the Zombie chef in the kitchen complete with old-style stove, jars and table!

Write letters from the Vampyre's haunted office!

Pull the lever hidden in the chimney to release the drop down staircase and access the top floor!

Top floor features gramophone, records and newspaper LEGO® elements.

Customize the Haunted House with new stickers for wall hangings, spider webs and curtains!

Measures 15.4" (39cm) high, 9.4" (24cm) wide and 7.5" (19cm) deep"

Some overlapping information between your introduction and the Lego description isn't an issue, but it's important not to just repeat everything included in the S@H description in your introduction.

Listing Specific Information
Every strong Lego listing should include a section that discusses information specific to the listing. For example, if you are selling a part of a set, or a minifigure, this is the place to tell the buyer this. Be sure to thoroughly explain exactly what the buyer is bidding on here. Don't hesitate to format words or sentences differently for emphasis or effect, but make sure the emphasized text doesn't look ridiculous. Also, be sure to state the set comes from a pet free/smoke free home if applicable.
This section can also include any specific shipping, insurance or bidding information as well. While some refer to this as the fine print, it's very important to clearly communicate any information that would have an effect on bidding to the seller. This listing does a very good job of explaining listing specific information:
 

Personal Touch
It always helps to bring a human element to your listing by adding some personal observations or opinions about the set as long as they are positive. Also, always thank buyers for considering your listing. See below for a listing with a nice personal touch:
 

Things to Avoid In reviewing eBay listings for this article, I came across a number of listings that were utter disasters. Here are a few to consider for what they've done incorrectly:

Don't use loud backgrounds like this. They're an eyesore!

This description is too overwhelming and confusing – what is with all those set numbers?

Setting the Price
There are three primary decisions to make when setting your price:

• Selecting Auction or Fixed Price sale
• Determining the price
• Determining the auction duration

Selecting Auction of Fixed Price sale
Sellers need to determine whether they want their sale to be an auction or a fixed price. Auctions typically garner higher prices, but there is always the risk of not getting what you feel you deserve for your set. Sets garnering significantly higher secondary prices should be safer auction bets than ones that are selling close to MSRP, so consider a fixed price sale if flipping unretired sets, and an auction for well performing retired sets.

Determining the Price
The most important decision a seller will make is the selling price of their merchandise. If the seller has selected an auction, eBay recommends that setting a $.01 starting price will garner more bids and yield a higher sales price. EBay also gives you the option to set a "Buy it Now" price. If selected, BIN has the effect of setting an anchor price, which can be good and bad: good because it gives buyers an idea of what you want to get for the set, but bad because it will cap bids at this price. While it's the seller's option, I would suggest not setting a Buy it Now price.

Determining the Auction Duration
The final part of setting your price is to determine the length of the listing. EBay claims the longer the listing, the more likely the merchandise will sell at a higher price. Also, eBay gives you an option to schedule a start time, which is really a way to set your finish time. This is critical because you typically want your auctions to end when there is the most traffic on the website. If you're in the United States, this would likely be between 8 -10 PM Eastern. To finish it at this time, be sure to start the auction at this time.

Selecting the Shipping Options
EBay gives you two options for shipping: the eBay suggested option which in the US is USPS first class for US domestic packages, and the "create your own shipping" option that allows you to customize your shipping. Some sellers require a signature for expensive shipments, and first class shipping provides this as an option for an additional fee.

The Create Your Own shipping option is good if you are savvy or experienced with shipping. Before doing a significant amount of shipping on eBay, I would suggest new sellers review the cost of each of the shipping options eBay provides to learn your preferred shipping option.

For pros and cons of different shipping options and carriers, stay tuned for another blog entry!

Finally, eBay also offers you the option of including free shipping with your order. I would only suggest providing free shipping if you set a fixed price sale and build the shipping cost into the fixed price. Otherwise, I would always have the buyer pay shipping.

Reviewing the Listing
This is your last chance to check everything in your listing. Be aware – this is EXTREMELY important. For proof, check out this forum post:

http://www.brickpicker.com/forum/index.php/topic/3315-lol-ebay-whoops/?hl=ebay (sorry eRacine)
Needless to say, always check everything on your listings. You don't want to risk a mistake that could wind up in a canceled listing or, worse yet, bad feedback from a buyer.

Seller's Rating
While writing a good listing is crucial, it's also important to understand the importance of a seller's sales rating. The number in parentheses next to your seller name is a count of the ratings a seller has received from past transactions. Someone with hundreds of positive sale ratings will always be considered a low risk seller for buyers, and will usually command top dollar for their listings. For the new Lego investor, I suggest selling small Lego sets such as polybags or sets under $10 to increase your sales ratings. That way, once your large sets appreciate, your strong sales rating, combined with a good listing, will get you top dollar for your listings. If you have more than 10 ratings (hopefully all positive), you will receive a number in parantheses next to your seller name. This will allow buyers to easily review the feedback and hopefully provide them with a higher comfort level that you will deliver what you are selling.
 

It's a Shame About Ray
Crafting and posting an effective eBay listing is critical to attracting buyers to your eBay auctions. Buyers will appreciate the accuracy, detail and relevance of a good listing and will be more willing to place a bid an auction with one.

I haven't seen Ray in ages, and I miss hearing his signature "red hots" call - it always reminded me I was on my way home. While eBay buyers may not have this same emotional connection, positive feedback from good sales will grow your reputation, much like Ray's voice did for his business. In a sea of thousands of Lego auctions, make sure yours stands out.

As always, invest accordingly.

Remakes, clones, variants, redo’s, copies, call them what you will but they play a big part in the savvy investors thinking. Especially in the most beloved Star Wars theme. There is almost always a remake or two, or more, in every new wave of Star Wars themed Lego sets that are released these days. In fact it has become one of the common criticisms of the theme across many Internet fan sites and discussion forums.

So what impact do remakes really have on secondary market prices, both on the old set(s) and on the newly introduced one? Is it always a negative impact? And can we predict what sets may be remade in the future?

First we need to look at what sets have had remakes, what is the scope of the issue here? Well if you put the search term “X-Wing” into Brickpicker or another Lego set database you’ll get 12 results of sets with X-Wing in the name. That is a huge amount of sets based around one type of ship. For the scope of this article I’m only going to be looking at full sized models i.e. I will exclude mini-builds, polybags, and the planet series. Information on those could be an article on their own and I want to examine what the effects of remakes are for the larger sets that are more commonly used as investments. Small polybag sized sets aren’t really going to influence a large scale model that much. I’ll also be excluding any set bundles like 65145 as there is insufficient data on those.

Here is a chart showing all the Star Wars remakes I could find:

This shows there are 36 different combinations of remakes, far more than I would have thought. 20 subjects have a twin, 10 belong to a group of three, 4 groupings of four sets, the mighty Millennium Falcon has 5 incarnations, and the X-Wing has a staggering 7 different versions! Hopefully I’ve captured them all, but there may be one or two I’ve missed (sometimes it can be hard to spot a remake if the names aren’t similar). There are also a few grey areas around what exactly should be considered a remake, for example I’ve excluded the 4501 Mos Eisley Cantina from the Landspeeder numbers even though it has a Landspeeder just because I think the focus of the set is wider than that vehicle. There’s also the R2-D2 Technic set with the new UCS model, but I feel they are so different they should be separate.

OK, so how do these remakes affect the secondary market prices of sets? Well it can be a little hard to determine, especially as we don’t have perfect and complete information available. Ideally, we would be able to go back right to a sets’ release date and view monthly current prices all the way. We can’t though. What we do have is the CAGR of each set over it’s time since release as well as rates of return for the last 24 months, 12 months, 6 months, and 1 month, which are based on the current market price changes over those periods according to Brickpicker data sourced from Ebay US. (Data from other Ebay regions have recently been added but will take time to build historical information).

Examining the return rates of sets that have had a remake vs those that have not may provide us some insight into how a remake may affect values. Using 24 month and 12 month rates of return are probably our best option as we don’t have to go back to the release date of a set. Using those measures is also more relevant to current investment trends. Likewise, comparing the return rates of sets that were for example released in 2004 and then 2007 is difficult as we can’t really examine the impact of the 2007 set on the 2004 set. So what I have decided to do is look at all the sets that have had a recently released (within the last 2 years) remake.

Taking all our Star Wars sets released from 2011 and prior that have had a remake in either 2012 or 2013 we have 22 sets across 11 different subjects (vehicle or set types)(also excluded the advent calendar). Looking up all 22 sets and getting their respective 1 year return rates from the awesome Brickpicker tables, we can calculate an average of -8.69% return across them all. That is quite a drop! I then looked up all the rest of the Star Wars sets that have no remakes at all, so have only had 1 set made on that particular subject. There are 138 of these sets and their average 1 year return rate is -1.62%. That means that in the last year their secondary market price on Ebay US has shrunk by an average of -1.62%. (As an aside I was surprised by these negative 1 year return rates, I had to check my data a few times but it was correct. This is a curious result, what is causing it? Possibly Star Wars Lego fans moving into the LOTR theme is one theory I thought of, but looking into that would be a whole other article!).

I also took all the sets released in 2010 or prior and looked at their 2 year return rates (the total percentage gain you would have if you bought the set 2 years ago at the market price and sold it at the market price now). There are 31 different sets across 17 different subjects that have had a remake in 2011 or later. For these 31 sets the average 2 year return rate is 1.81%. Not a great result for 2 years storage time. For comparison, looking at the Star Wars sets that have not had any remakes at all, found 128 sets and their average 2 year return rate was 13.35%.

These results can perhaps be visualized a little better in the chart below:

As you can see, this analysis has provided solid evidence that remakes or clones negatively affects the secondary market price growth of the original or earlier released versions.

Let’s look at some specific examples that should help to illustrate this issue.

The above graph shows prices for the two V-Wing sets. 7915 was released in 2011 and has stopped the price growth in the older 6205 set for a period of time. Looking at raw prices is interesting, but we can examine this effect more closely by taking the growth rate of the set price from period to period i.e. the rate of change from one period to the next in the market price. Lets look at that for the V-Wing sets:

This shows that once the newer 7915 set was released there was a dramatic drop in the growth rate of the older 6205 set. This was alongside the traditional negative growth for 7915 that we see in a new retail set as people take advantage of regular store discounts to obtain the set below retail prices. Both sets then track each other back to more normal positive growth rates in the period from 6 months ago to last month, before both taking a bit of a dip in the most recent price results.

Notes on the above, and subsequent, graphs:

• Care should be taken when interpreting the graphs in that the X-Axis (horizontal time period) is not linear. i.e. it does not follow regular intervals. Yearly growth rates are presented up until the “6 months ago” point at which time the gap we are measuring is actually 6 months, then to the “last month” point where the gap is only 5 months, and finally the “current” point which is only 1 month of growth between our current market price and what it was 1 month ago. Often the shorter gaps will have lower growth numbers or tend to be closer to zero, that makes sense as growth over a whole year is often greater (either positive or negative) than just a month.
• Given the above issue, it is important to note that the purpose of the graphs is to compare between sets, and not necessarily to look at the growth trend for any one set. (If you want to look at one set go to the Brickpicker page for that set and look at the excellent graphs and tables available there).
• We only have data for the retail price, the 2 years ago, 1 year, 6 months, 1 month, and current prices. Therefore, for older sets, to predict what the price was between the sets’ release year and 2 years ago it was necessary to take the retail price and the 2 years ago price and then average out the price movement across the intervening years. This is almost definitely not accurate, but it is the best we can do unless we take a guess at how a set may dip after release to then rise at EOL, but that will be different for every set. I have shown that difference in the X-Wing graph later on.
• Data was taken from the May-13 release of Brickpicker data that was for the period ending Apr-13

Lets have another look at another clear example. What better than the aptly named Clone Turbo Tank. Two great sets, 7261 released in 2005 followed by 8098 in 2010, both of similar size and design.

Again, the original set has strong price growth before the release of the remake curtails and depresses it. Looking at the percentage growth period to period it becomes even more apparent:

The new set comes in and it’s greatly received and immediately shows growth while its predecessor plummets before returning to a more normal growth.

Here is a more another interesting example. Looking at just the 2 most recently released Y-Wing sets. The 8037 released in 2009 and the new 9495 released last year:

Because the 8037 set was released in 2009 and most likely was available for perhaps 18-24 months on retail shelves we get a nice view of the dip in price to 2011 for our first available price measuring point. The set goes EOL and immediately jumps 25% only then to have the 9495 come along and take the wind out of its growth sales.

How about when the newly released set is a better model? Perhaps a good example is the recent 9492 TIE Fighter which is an improvement over the old 7263 model.

The old 7263 enjoys moderate growth until the new improved 9492 is released, whereby it drops sharply. The 9492 drops initially as well, providing a text book example of heavy retail discounting affecting the Ebay price. Both sets then recover a little and their growth rates track almost identical patterns. I had expected a bit more of a drop for the old model here though as I think that the new one without the blue colors is so much better, but perhaps I’m a little biased and the general public don’t share that view.

Another good example of an upgraded set is the Imperial shuttle. The recently released and newly retired 10212 UCS Imperial Shuttle has had an impact on the prior 7264 Imperial Inspection that was also a very nice set.

7264 saw very healthy growth through to 2012. The release of the new UCS set appears to have taken a little while to have impacted unlike some of the immediate impacts we have seen before. This may be due to the 10212 being released in the later part of 2010 and not having many discounts for a while. But 6 months ago as retail discounts for it occurred and rumours of its imminent retiring circulated, the increase in demand pushed down our 7264 set and it is perhaps not yet recovered as the 10212 takes off after recent EOL.

OK, lets get a little more complex and check out some examples of multiple releases. The Millennium Falcon has had 5 different decent sized sets released over time. It’s an iconic part of the Star Wars universe and obviously very popular, so The Lego Group have released new version fairly regularly. Also, unlike the X-Wing it is a unique ship i.e. there is only one Millennium Falcon, while the X-Wing is a class of ships with a few different variations. The raw price graph is dominated by the juggernaut that is 10179 the UCS set, so lets just look at the growth percentages:

Things look a bit messy, even after not including the 7190 set from 2000, but upon closer examination you can see the effects each new remake has had on the prior versions. The orange shaded area highlights the most interesting point for which we have good data. This is where the most recent set, 7965, was released in 2011 and shows the subsequent drop in all the sets price growth in 2012. That is for all except the phenomenal 10179, it seems this UCS behemoth is impervious to the power of the clones!

The X-Wing is an even more complex situation, with 7 large sets across history including the recently released 10240 UCS version and another one, 9493, still on retail shelves. Impacts on the very early versions are hard to examine so let’s look at the four most recent sets:

There is a lot of information contained in the above chart. Firstly, I’ve included a dotted path for 6212 which I think gives a possibly more accurate view of what the trend for this set would have been in the past. As I’ve already stated, we only have the retail price and the 2011 price as markers to go by, so drawing a straight growth line between them is the most consistent thing we can do. But there would most likely have been a drop after retail release reflecting discounting, before recovering and moving into high positive growth after EOL. The size and timing of the dip and recovery will differ between sets a bit though.

Second, the blue shaded area shows us that when 9493 was released there was an associated drop in price growth for the existing 6212 and 4502 sets. Thirdly, when the 10240 was released last month there was a sharp drop in that next most recent 9493 set and a slightly smaller one for the old 4502. But the 6212 has recovered a little and this shows it may come back to a more normal growth trajectory. It will be interesting to see how this plays out in future months as the new 10240 UCS set continues at retail and the 9493 goes EOL at some stage. It would also be interesting to look at the effects on the other UCS X-Wing 7191 set once we have more time periods.

In summary I think the evidence is very clear that remakes do indeed affect the secondary market price of the older versions. The magnitude of that impact is perhaps hard to tell at an individual case level as there are other contributing factors such as:

• The age gap between the remakes
• Is the set very similar in size and retail price as the original – probably increases the impact
• Is the set an improvement on the older model?
• Retail discounting of the new set
• UCS sets possibly immune, or at least far less influenced?
• Is the theme itself, or the Lego market in general, on the decline, or experiencing a soft spot in growth?

On average though it would appear that that remakes effect values by lowering growth by around 6 to 7 percentage points per year for a couple of years before recovering to more steady, but lower, growth paths. Over time we will have more data that should help us judge the materiality of the suppression of longer term growth.

Future Clones?

Can we use our knowledge of past remakes to perhaps predict what sets that Lego may decide to do a remake of in the future? This would help us make investing decisions either by avoiding possible remake sets or by not holding them for too long.

The Star Wars theme is quite mature, there are limited options available for new ships, vehicles or settings on which to base a Lego set on. There are a few, but they tend to be from more obscure parts of the Star Wars universe and don’t have the wide appeal that well known iconic subjects do. The saving grace may be the new Star Wars movies being made by Disney, which should open up a lot more possibilities, both for new set subjects and for remakes of old ones that make a new movie appearance.

Also it would seem that the very iconic ships such as the X-Wing, Millennium Falcon, and to a lesser degree the other “Wing” type fighters, Slave I, Walkers, and Shuttles all seem destined to have regular remakes. I’d be hesitant to hold onto any of those models that weren’t a UCS one for any long length of time.

Of the currently remade models presented in the first table we can look for sets that have been remade before but the latest version is now getting a bit old. The AT-ST, Snowspeeder, Jedi Starfighter, and TIE Interceptor are all candidates for a possible new model.

Looking into the other Star Wars sets that have not had a remake may throw up some possibilities. I have gone through 136 sets in this category and here are a few likely candidates in my opinion:

• C-3P0
• Cloud City
• Darth Vader
• Gungan Patrol
• Mos Eisley Cantina
• MTT
• Rogue Shadow
• Sandcrawler
• Stormtrooper
• TIE Bomber
• TIE Crawler
• TIE Advanced
• Trade Federation AAT

No doubt I’ve missed a few and Lego are never that predictable when it comes to future releases, but I think there exists a decent possibility that we’ll see sets based around some of those subjects again.

Remakes occur for a reason. The Lego Group puts a lot of time into deciding new sets and bases a large part of those decisions off previous sales demand. Remakes are usually done on popular subject material and therefore have higher demand, leading to higher demand on the secondary market. Set subjects of only one model are usually more obscure and have less general appeal, so should in theory have less demand. A classic case of supply and demand at work. Higher demand leads to higher supply, which suppresses prices in the secondary market. Imagine if there was only one X-Wing model ever released, the secondary price for that would be astronomical!

So in conclusion, beware of those clones! Wise investment decisions should be based around as much knowledge as possible, and the knowledge that a new set is about to come out based on a subject that is the same as one you have stashed away in the form of an earlier version, means you should seriously consider liquidising your investment pronto. Don’t get hit by an attack of the clones!