"You take the blue pill, the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill, you stay in Wonderland, and I show you how deep the rabbit hole goes."

These are the words of Morpheus, a prophet in the sci-fi thriller The Matrix, and I think they accurately describe the choice many Brickpicker members face early in their investing career. Should I try to learn and understand the Lego secondary market, or take it for granted that it will exist as it does now? This is not an easy decision since information about the aggregate market isn’t readily available. So taking the blue pill is simple: buy some sets people think are great and hope for the best. Taking the red pill is scarier: the more you learn about the market, the more daunting and wrought with peril it may seem. To be a savvy, profitable investor you must learn as much as you can about the market you seek to exploit. That way, you will be able to properly decipher threats to the market, and adjust your investing strategy as circumstances dictate.

The most recent potential threat to the secondary market is Pleygo, an online Lego set rental company. Pleygo operates very similar to Netflix, the subscription movie delivery service that revolutionized the movie rental industry and killed brick and mortar movie rental companies. Pleygo appears to be quite user friendly. After signing up for a subscription, a new user adds sets to his Wish List, and Pleygo sends the first available set on the Wish List to him along with return postage. Once the user sends returns Lego set, Pleygo sends the next available set on the Wish List.

Pleygo’s value proposition to parents is compelling: for a reasonable monthly fee, kids and adults can satisfy their "Lego fix" by building a variety of sets without the drawback of providing the space required for sets and boxes. Pleygo offers three levels of pricing, or “plans” that consumers may purchase: Fan, Super Fan and Mega Fan. The Fan package allows members to pick any small or medium sized Lego set, Super Fan’s may pick any small to large sized Lego set, and the Mega Fan plan will allow members to select any set in the Pleygo portfolio, including the enticing “huge” sized Lego sets that include Millennium Falcon (7965, not 10179 - sorry guys), Super Star Destroyer, Taj Mahal, etc. While there are only eleven “huge” sets to choose from, I’m sure Pleygo will add more as the business expands. Pleygo also emphasizes their commitment to safety and cleanliness by sanitizing every piece returned by a member.

Pleygo sounds like a great concept, and indeed the business has already attracted venture capital funding, so a lot of smart people have bet on the future success of this business. If Pleygo succeeds, what effect will it have on the secondary investment market so important to Brickpicker members? To answer this, we must first determine whether Pleygo is a competitor to the secondary market. If it is, and the secondary market shrinks significantly because of Pleygo, Lego investors could be left holding millions in unsold inventory staring down the barrel of a significantly diminished market.

To start, we must determine who buys Lego sets on the secondary market, and whether their Lego needs will be better satisfied with Pleygo. The clearest way to do this is to segment secondary market buyers. I believe secondary market buyers fall into one of two market segments: AFOLs or “Adult Fans of Lego”, and parents of children who insist on having certain sets.

These market segments can be further segmented to properly illuminate the market. For the AFOL segment, secondary buyers include Lego collectors, MOCers, and casual adult Lego fans that typically purchase Lego sets for their kids rather than themselves.

Among AFOLs, Pleygo may appeal to some in the Casuals and MOCers market segment, but MOCers will not forgo secondary market purchases for Pleygo. Those few Casuals that sign up for Pleygo themselves may stay with Plego instead of secondary market sets, but Casuals are the smallest segment of AFOL secondary buyers anyway and the few lost to Pleygo will likely not be significant. Collectors may want to use Pleygo to see whether they like a certain set before buying it, but I don’t see collectors buying fewer sets for their collections/displays because of this service. If anything, collectors may be encouraged to buy more sets since they can try out new ones frequently and cheaply with Pleygo.

That leaves parents buying sets for their kids as the remaining possible market segment that could turn to Pleygo at the expense of the secondary market. Here is my simple segmentation of this market:

The three market segments in the Parent Market are the Whiny Kid Buyer, the Lazy/Unsavvy Buyer and the Kid Collector Buyer. Everyone knows a parent like the Whiny Kid Buyer: they will drop untold amounts of money to keep their kids happy. These parents act at the whim of their child, and while Pleygo may be offered by Mom or Dad as an alternative to expensive sets demanded by “Little Whiny Johnny”, Johnny will not relent if he wants a retired Lego set. I see this remaining a strong segment for the secondary market. I believe the Kid Collector segment will maintain its connection to the secondary market for the same reasons the AFOL collector will. That leaves the Lazy/Unsavvy Buyer as the last remaining market segment to be stolen from secondary sellers. With proper marketing, Pleygo could make some inroads into this market segment, so the secondary market may feel a threat to this market segment from Pleygo.

From Pleygo’s perspective, their key market demographic is parents who want to reduce their cost outlay on Lego sets and save storage space in their home. Their target demo is evident in their value proposition: saving money and saving space satisfy parental needs, not children’s. Generally, young Lego enthusiasts would rather own a Lego set, but will accept Pleygo as an alternative to no Legos, so they aren’t really Pleygo’s target market. Typically, Pleygo’s target buyer wouldn’t be using the secondary market to buy sets for their children anyway, unless they fall into the small Lazy/Unsavvy Buyer segment.

As a result, I don’t see Pleygo threatening the secondary market much. While it’s possible there could be some defection from the Lazy/Unsavvy Buyer segment to Pleygo, it will likely be limited as the Lazy/Unsavvy Buyer uses eBay because it’s easy and familiar, and Pleygo would be something different. I believe Pleygo could actually be good for the secondary market since it could stimulate sales to collectors that may not be familiar with or closed off to themes they can access cheaply through Pleygo. Interestingly, Pleygo also has links to Amazon third party resellers for sets that have been retired, so Brickpicker members that are third party Amazon sellers could actually have a new market opened to them by Pleygo.

I can’t stress enough to Lego investors how important it is to learn about the market. Savvy investors know the Lego secondary market inside and out, and can foresee trends instead of being caught by them. I would hope every Brickpicker member would "take the red pill", and try to thoroughly understand the market you hope to capture. In the words of Morpheus, “No one can be told what the Matrix is. You have to see it for yourself.”

"ED"itor's Notes: I have to agree Quacs on this one. Pleygo might be tempting to the casual LEGO fan, but any hardcore LEGO fan(...and that is most LEGO fans in my opinion) wants to collect every imaginable brick and LEGO set...and even multiples of sets. I know I am an extreme LEGO fan, but I think I speak for many LEGO fans of all ages when I say they want as many LEGO sets and pieces as possible and don't want to "return" anything. Not one piece. LEGO sets are not used video games. The bricks never go bad or get outdated. A twenty year old brick is the same as a new one and LEGO fans want more pieces to build bigger and better MOCs. I really think the creators of Pleygo misjudged LEGO fans in general. While it might work for some parents and LEGO fans on a budget, the kids will want to keep the set. In the long run, I see this failing as a business model. Just my two cents...

"Greed, for lack of a better word, is good."

These are the immortal words of Gordon Gecko, a fictional maven from the movie "Wall Street" who made millions "parting out" struggling companies with asset-rich balance sheets. As I peruse Brickpicker on a daily basis, these words always echo in my head. For most members, BP is part of their Lego hobby: the Pricing Index, Discussion Forum, and blog articles provide outlets for members to share, enrich and supplement their Lego hobby. Yet Brickpicker is, at its core, a powerful tool that’s been crafted and honed to fulfill one primary mission: to give members a better opportunity to make money.

While the word “greed” may be a little unsettling, the spirit of Gordon Gecko’s infamous mantra should be embraced. Whether members use their Lego investment income to supplement their Lego habit, their mortgage payments, or 401Ks, more money is better! Yet, day after day, I read posts on the Discussion Forum that espouse uninformed purchasing decisions, and cringe when other BP members echo in agreement. The goal of this blog entry is to educate readers on the fundamentals of portfolio management and investing to help BP members build a better portfolio.

Portfolios – what are they, and why do we use them?

In the high stakes world of finance, a portfolio is a collection of investments that are strategically selected to maximize a return at an estimated level of risk, or to minimize risk at a given level of return. Asset classes, or types of investments that professional portfolio managers buy, include stocks, bonds, real estate, commodities, and cash, among others. Interestingly, art and collectibles can also be part of a well-rounded investment portfolio, and I would be willing to wager a number of Lego investors already have a portion of their net worth wrapped up in this asset class! The market provides thousands of asset classes and investments to financiers, and shrewd portfolio managers target specific investments from all of these asset classes to build a portfolio.

Within the Lego investing realm, the closest parallel to asset classes are themes since their sets share certain characteristics. Similar to a portfolio manager, the savvy Lego investor should target investments from different themes to build their portfolios. Why pick from a variety of themes? Like the old “eggs in one basket” analogy, there is value in diversifying the portfolio: when one theme or set size doesn’t appreciate as expected, there are other earners to pick up the slack.

Investment Profiles - Risk and Expect Return

Portfolio diversity is achieved by strategically selecting a variety of sets across themes and sizes, not just purchasing different theme sets at a discount. When targeting sets to purchase, the Lego investor must consider the risk inherent in the set, and the expected return on the investment. To adequately decide whether a set is right for investment, its risk and expected return should be always be estimated and compared to other options (sets) available to the portfolio.

In finance, risk roughly correlates to the range of expected prices the set could realize after retirement – the wider the expected range of returns, the riskier the investment. Unfortunately, there’s no statistic or financial model that that quantifies risk of Lego sets, so other more subjective methods must be used. To assess risk, we can review the range of prices that similar retired sets sold for in the past. For example, let’s assume we are trying to assess the risk of investing in 7498 Police Station. Since it’s still on the market, the savvy investor will review the previous performance of similarly sized “base-type” sets from the City theme to build a risk profile for this set. Here are some raw numbers from comparable sets:

What do these sets tell us about the risk profile of 7498? Incredibly, they have been very consistent performers, with returns from these comps (comparable sets) fluctuating between 83% and 97%, a nice tight window. Let’s contrast that with a risk profile for 79003 An Unexpected Gathering:
 

The range of ROI for these comps provides a high risk profile for this set as comparable ROIs yield anywhere from a 14% loss to a 138% gain. The idea isn’t to estimate the value here, so I would assign 79003 a label of “high risk” while I would assign 7498 Police Station a “low risk” label.

After assessing the risk of these two sets, we must create an expected return profile. Expected return is the amount of money the investor thinks the investment set will sell for on the secondary market. The two primary factors that affect secondary market demand are primary market set popularity and primary market availability, but because TLG keeps sales by theme and production numbers private, we must once again make subjective estimates for each to determine comps. Brickpicker provides eBay sales of the top 50 sets by month to give users an idea of what’s selling, and Lego S@H and Brickset can be used to determine the “Exclusive” and “Hard to Find” sets that are on limited production runs or are otherwise not readily available to all distribution channels. Investors must also consider the length of time a set has been on the primary market as a crude measure of production as well. These characteristics form a profile for the set that are then compared to other comps. Piece count and theme similarity should also be considered when finding comps for the investment set in question.

Lego investors should also factor purchase price into their expected return metrics. If I buy 7498 Police Station for $75 instead of the $100 MSRP, I add an additional $25 to the expected return, making the set an even more attractive addition to the portfolio.

To determine the expected return profiles for 7498 and 70003, let’s look again at the tables from our risk example. For 7498, I would drop 7240 from the comparison since it had significantly fewer pieces and a lower MSRP, so I would expect returns from 7498 to be around 90%. For 70003 An Unexpected Gathering, I would lean more toward performance of The Burrow and Mill Village Raid since the POTC and PoP sets were less popular themes and movies than HP and LOTR/Hobbit, and Mill Village Raid is a castle theme that’s quite similar in design to the LOTR/Hobbit themes. I would also peg the expected return of 70003 at 90%.

While the low risk/90% return for 7498 appears to have a more appealing profile than the high risk/90% return for 70003, I want to be clear that the profiles this process yields are not absolute. Two intelligent investors assessing the same set can arrive at very different investment profiles. For fledgling investors, developing a habit of routinely assessing potential sets based upon risk and return profiles is more important than being in agreement with the analysis of other Brickpicker members. As new investors experience sales cycles from start to finish, they will begin to learn how and what sets sell, and through time and experience, can refine their profile assessment strategy accordingly.

Personal Investing Profiles

With our investment profiles established, we can begin to construct our portfolio. But before diving in, an investor must answer three key questions to define their personal investing profile:

• What is your monthly budget?
• What is your investment time window?
• Does it bother you to lose money on sets for the chance at higher returns?

The answers to these critical questions must shape the types of sets selected for your portfolio. For example, if my monthly budget is $100, I have a three year time window before seeing profit, and I am risk averse (or don’t like seeing losses on my sets), I would select sets that fit these criteria:

• Small to medium sized sets (at least to start)
• Lowest risk profile at the expense of a little return
• Expected EOL within 1-2 years of the purchase date

At $100 per month with a 3 year time window, the total budget is $3,600 to spend before returns on my first purchases will begin. Between the two Set Investment Profiles we’ve developed for 7498 and 70003, it appears 7498 fits well into my portfolio, especially if I can get this set at a good discount. On the other hand, the investment profile for 70003 probably will not work since the risk profile is on the high side.

Each investor must track their portfolio diligently, and as many members already know, Brickpicker’s Brickfolio feature is an especially useful tool for this purpose. I would suggest including each set’s investment profile (risk/return) in the “Notes” section of each set’s “Edit Collection Details” page so that you always know the parameters you used when deciding to purchase.

Once a Lego investor sells a set in the portfolio and realizes income, there are a few key steps to take before closing out the sale:

• Calculate ROI, or return on investment, for the set
• Calculate CAGR, or compounded annual growth, for the set
• Update the portfolio’s overall return
• Assess the set’s performance critically

ROI is a simple percentage – subtract the purchase price from the sale price, and divide it by the purchase price. This simple metric provides you with a return on your investment. CAGR is a little trickier, but a thorough analysis can be found at the following Brickpicker page:

http://www.brickpicker.com/index.php/blog/view/cagr_compound_annual_growth_rate_and_lego

The difference between CAGR and ROI is that CAGR incorporates a time element, so you can quickly understand the average annual return from your set. A higher CAGR will tell you the set returned profit quicker than a set with lower CAGR. The Brickfolio doesn’t offer tracking of sales gains yet, so a separate spreadsheet or ledger should be kept for tracking and tax purposes at a minimum. Finally, performing an “autopsy” on a set after it’s sold will help educate the investor on how to better assess risk and expected returns for future investment sets. While we hope all of our sales net profits, often there is more to be learned from failure than from success.

With the daily concerns raised by members about new entrants into the Lego investing community, it’s more critical than ever to understand who you are as an investor, and how you like to invest. Investing your money in Lego systematically will allow you to make better investment decisions and give you a leg up on less savvy investors. In the immortal words of another self-absorbed movie character, Jerry McGuire's Rod Tidwell beckons us all to, “Show me the money!”

"ED"itor's Notes: This is an excellent article that relates common stock investing to LEGO investing. Years ago, my first boss, Edd Kluth (a multimillionaire), taught a young punk like myself how to invest in stocks and mutual funds. He invited his financial planner to one of our weekly corporate meetings and the basics of dollar cost averaging were explained to a 20 year old kid. Mind you, this was a big deal. This was before today's internet and TV business and stock shows that help guide people through basic Investing 101 and show the hot stocks of the day. Mutual funds were taboo topics back some 25 years ago, but investing in mutual fund and learning the basics of dollar cost averaging made me some nice profits over the years.

Fast forward 25 years...While I still invest in stocks and mutual funds, a good portion of my investment dollars goes towards LEGO sets. As Quacs so eloquently stated, there are many ways to invest in LEGO sets. Short term. Long term. Low risk. High Risk. Different asset classes or themes. And so on...Whatever works for you. I have always been a long term investor, slowly accumulating sets over the years, buying low and making paper profits. While I haven't sold my sets as of yet, the slow and steady approach has made me thousands of dollars over the last 5 years. I am not telling you to use my method. Storage is at a premium and expensive and my money is tied up, but that is the price I pay to sleep at night. Good luck on your LEGO investment journey...
 

In a scene from the gut-busting movie History of the World, Part 1, Mel Brooks, playing the role of Moses, brings 3 stone tablets received from the hand of God down Mt. Sinai to the people of ancient Israel. As he takes the final steps of his harrowing trip, Moses steps in front of an assembled throng and proclaims in a booming voice, “I PRESENT TO YOU THESE FIFTEEN…”, accidentally drops one of the three tablets he’s holding and quips, “Oy, ten…TEN COMMANDMENTS FOR ALL TO OBEY!” As God himself gave his fifteen laws to Mel Brooks, veteran Brickpicker members have bequeathed their own investing rules to the rest of the Brickpicker faithful. These rules can be found dotted throughout the Discussion forum, Evaluation Corner articles and Investing Blog, and they provide investors with a wide array of plausibly accurate, seemingly tried and true Lego investing truisms intended to help new investors develop their own portfolios. While these axioms usually seem plausible and well-reasoned, as I have progressed as a Lego investor I’ve found most of them needed a thorough assessment to determine their accuracy.

Let’s dive into the gospel according to Brickpicker members to see what these truisms are, and whether they hold water:

Commandment #1: Thou shalt buy what you like
This is probably the number one piece of advice given on this website, and I’m always floored by what bad advice this could potentially be. The logic seems sound: buy what you like so if the set goes belly up in the aftermarket, you can always build the set. From a financial perspective, executing this strategy is suicide for returns from your portfolio. As a simple example, let’s assume I had the following portfolio I wanted to liquidate today:

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• Portfolio return if you decide to build 8070 is [($167 + $71) – $270] / $270 = -12%.
• Portfolio return if you decide to sell 8070 at a loss is [($60+$167+$71) - $270] / $270 = +10%

From a financial perspective, opening the box and building the set will lead to a loss for this portfolio (assuming it’s not sold as a used set). The smaller collector-investor is especially susceptible since smaller portfolios can’t absorb the loss of entire sets. For people that invest in more than one of a set, this truism poses another issue – who wants to build and display more than one copy of the same set? Buy the sets you like and build them, but keep them separate from your investment portfolio. Also, limiting your portfolio to only certain themes you like not only limits portfolio diversity, but it can limit low risk sources of profit.
Barring a catastrophic economic collapse, your investment sets will always have some value and profit-driven investors will always try to squeeze as much profit out of each set to protect their portfolio’s return. This commandment is bogus. Invest in profit potential, not sets you would like to build.  
 

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"ED"itors Note: I have to take the blame for this Commandment. This is all my doing. I told people to buy what you like in one of the first Blog articles I wrote for the site. Silly me. Of course at the time, I invested heavily in UCS STAR WARS sets, so the plan worked for me(see Commandment 4a). Now in days, I invest in Friends themed sets, even though I will never build one, because I know they are investment winners. So all in all, I agree with Quacs...if you want to make money, diversify and buy the best sets, not what you like. Perfect example of this is the Atlantis theme. I loved the theme...It's a dog. Case closed.

Commandment #2: Thou shalt purchase trains
One of my first eye openers after joining BP was learning the popularity of Lego trains. Before Brickpicker, I never knew the depth of the theme: Lego trains appeared as early as 1966, and new sets have been routinely released ever since. As a kid, I always thought these trains were great toys (although I never had my own), but I only learned of their profit potential after tracking the explosive profit of the retired Maersk Train. After perusing the train forum, I was amazed at the confidence members had in recommending trains for future profit potential and decided to dig a little deeper into the performance of the secondary train market.

Are BP members correct about train returns? Here are all of the retired train sets released since 2002 excluding the recently retired yellow cargo train:

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The chart above should leave no question to the merits of this theme: Lego Trains must become at least a part of any serious Lego investor’s portfolio. Almost every train set retired before 2011 has provided incredible returns, and the recently retired sets are already showing nice returns. The only apparent exception, 4534 Lego Express, has a disappointing (yet still acceptable) 25% return, but that’s likely because 4535 Lego Express Deluxe is a better version of this set (with the same cars as 4534) that was released at the same time. This commandment belongs on a Kevlar tablet and should be screamed from the top of Mt. Sinai!

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"ED"itor's Note: I agree 100% with this Commandment. I wrote an article on it awhile back. Not only are LEGO trains cool, but they bring back cool cash in the secondary LEGO market.

Commandment #3: Thou shalt not invest in City
For some reason, Brickpicker members tend to be bearish on the Lego City theme. While most believe the Modular and train sets will be winners, they don’t believe in much of the rest of the theme, citing frequent updates as the primary reason to stay away. In breaking down the City theme, I found four major subthemes: Police, Fire, Vehicles, and a category of rotating subthemes that have included marina, construction, farming, airport and most recently mining. For the most part, fig-sets, vehicles and buildings account for all the sets in each of these subthemes. Within the Police and Fire lines, I did find a few winners:

Police

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Fire

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Interestingly, these are the same sets investors have cautioned against investing in because of the frequent updates, yet returns from the sets are solid and fairly consistent across the board. The only outlier is 7208, but this set was just retired late last year and should be given more time to appreciate. While these sets will likely not spike in value immediately after retirement, police and fire stations appear to provide strong and steady gains while adding some diversity to your portfolio.

Even more enticing are sets from rotating subthemes such as farming, mining, airport and marina sets. Consider the performance of these sets:

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Those are some great numbers from sets retired a few short years ago. Keep your eyes open for larger, more striking sets in these rotating sub-theme lines as they have the potential to deliver some sizable returns. This commandment stinks – toss this tablet in the rock pile for pulverizing.

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"ED"itor's Note: I have mixed emotions about this Commandment. In my earlier LEGO investment days, I would never bother with a CITY themed set, yet today, I find myself buying quite a few larger CITY sets. They are solid performers and make for nice variety from the other licensed sets. As Quacs said though, there are always new versions coming out that affect older and retired set values.

Commandment #4: Thou shalt buy Star Wars Lego sets
Commandment #4a: Thou shalt buy Ultimate Collector Series sets
Since its inception, the Star Wars Lego theme has drawn collectors, and they in turn have drawn investors to the theme. This commandment and its corollary seem like two variations of the same meme. Yet, after reading Ed’s Evaluation Corner article about the bottom 50 performing sets, I was shocked to learn there were some Star Wars sets among the worst losers. After digging a little deeper, I found the entire Star Wars theme sports a CAGR of 9%, just below the 11% theme average CAGR, and not as high as I would expect from the most discussed theme on Brickpicker. While everyone knows how incredible the Ultimate Collectors Series have performed, I began to wonder if the UCS subtheme wasn’t propping up the performance of the entire Star Wars theme. To determine this, I independently calculated the average annual growth rate of the Star Wars UCS subtheme and, unsurprisingly, it was an incredible 29%. For a theme that’s been around 13 years, that is phenomenal annual growth!

If the UCS subtheme sets were removed from the Star Wars theme, SW’s underwhelming 9% average CAGR would drop even further. The average Star Wars set isn’t performing strongly after retirement, and investors should consider limiting Star Wars purchases for other sets. While there will always be some general Star Wars sets that will return a profit (I expect 7965 to perform well post-EOL), the true stars are Ultimate Collector Series sets. Etch commandment #4a into the tablet, and get rid of commandment #4.

There is one small note of caution, however. The latest retired UCS set is 10215 Obi-Wan’s Jedi Starfighter, and early returns haven’t been strong. It’s the only UCS set with a negative CAGR and while it while likely grow, it will probably be the worst performing USC set moving forward.

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"ED"itor's Note: I also agree with Quac's reasoning here. The Ultimate Collector's Series sets took me from my Dark Ages and basically was the impetus for this site. They are some of the best LEGO sets ever created and are wonderful investments. The non-UCS sets are quite average on the other hand...even below average in terms of CAGR. There are some regular STAR WARS sets that are outstanding investments, but most under perform as of late.

Commandment #5 – Thou shalt not buy Chima
I went into depth in an Evaluation Corner article about the potential of the Chima line, so please read it for more specific information. To summarize, now is not the time to add Chima to your investment portfolio because retailers haven’t discounted Chima sets and the television series hasn’t begun in earnest. With the absolute earliest retirement date for the first wave of sets at the end of 2013, there will be plenty of time to purchase Chima sets. With good pre- or post-Christmas discounts, this theme will be ripe for investing if the television show takes off. This commandment remains valid for now, but could be flat-out wrong by Christmas if the TV show maintains its early ratings. Be prepared to invest.

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"ED"itor's Note: I like the Chima theme. I think once the larger sets are released later this year, the theme will take off.

Commandment #6: Thou shalt only purchase larger sets
The logic behind this truism is simple: you can gain more profit for less work by selling a few well performing larger sets rather than a large number of small sets. For the small collector-investor, this is especially true since hobby time is usually in shorter supply than work time or family time. The allure of netting big profits from larger sets is also strong - wouldn’t everyone rather hit the Powerball jackpot rather than win a prize from a scratch-off ticket?

However, there are reasons to consider including small sets in your portfolio. Purchasing a variety of asset classes (or themes in Lego investing) with a variety of set sizes helps to diversify portfolio risk. Also, a higher yielding, smaller set will provide higher rates of return due its smaller cost basis, and it will always be easier to sell for the same reason assuming equivalent demand to the larger set. If you’re worried about a bubble, smaller sets will be easier to liquidate in a bear market. The tribe has spoken: this commandment should be stricken from the tablet.

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"ED"itor's Note: I have all different sized LEGO sets. Some of the smallest sets have the best returns. This Commandment is false.

Commandment #7: Thou shalt measure “value” with price per piece
Let’s compare the piece count, MSRP and PPP of two actual Lego sets:
Set A: 1,344 pieces, $70 MSRP, $.05/piece
Set B: 1,300 pieces, $150 MSRP, $.12/piece

Which of the two sets is more valuable? While some would say Set A appears to provide the buyer with more value, the correct response from a seasoned investor would be that it’s impossible to answer the question with the information provided. Here is the post-retirement performance of these same sets:
Set A: -$23 loss, -5% CAGR
Set B: $635 profit, 14% CAGR

As the example illustrates, PPP is a completely meaningless measure of value. Demand drives value; very few consumers, if any, buy a Lego set because it sports a low price per piece.
I have a feeling there would be almost no Lego investor that would select 5525 Amusement Park, Set A, over 7191 Ultimate Collector Series X-Wing, Set B, to add to their investment portfolio. This commandment is erroneous and not worth the tablet it’s engraved on.

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"ED"itor's Note: The value of a LEGO set(most LEGO sets that is) is based on "weight" of the set, not the pieces. More weight, more ABS plastic, more money. Very simple equation.

Commandment #8: Thou shalt invest in licensed themes instead of non-licensed themes
I have seen this truism sprinkled throughout the Discussion Forum, and was curious if it was actually true. It turns out that among themes with above average CAGR, 6 of 28, or 21%, are licensed, while, 15% of below average themes (8 of 55) are licensed. This 6% difference doesn’t provide a compelling case that licensed themes perform better, so I wouldn’t use it as a rule of thumb. A theme’s secondary market performance will be determined by its demand, not whether it’s licensed. Anyone that invested in Prince of Persia because it was a licensed theme took some real lumps. It’s also telling that 80% of themes with above average CAGR are non-licensed themes. Ninjago, Friends, and Power Miners are all very successful non-licensed themes that beat a majority of licensed themes. This commandment should not be utilized for making investment decisions. Drop that tablet.

"ED"itor's Note: Licensed themed sets can go either way. This Commandment is retired.

Commandment #9: Thou shalt invest in Lord of the Rings I have noticed the exuberance of many BP members for the first release of the Lord of the Rings theme, and must admit I was excited for last year’s theme release. From an investment perspective, one would think the first wave of a theme based upon the most popular fantasy epic of all time should translate to high sales and high demand, but let’s try to support this opinion through assessing a similar theme’s prior performance. Harry Potter is also theme based upon a highly popular book series, and could be considered the flagship “wizarding” epic, akin to LOTR’s position in the fantasy genre. The first wave of the HP theme was released way back in 2001, and every set performed well post-EOL:

click to enlarge

While the table above illustrates the incredible returns from the first year of HP released sets, there is a significant difference between the two themes’ first wave of sets. At the time of Lego’s first HP release in 2001, the Potter craze was still relatively new, and Lego was able to capitalize on the freshness and fervor of Potter-mania. Not so with LOTR: this theme was released after all three movies had already been retired to DVD. While this may temper demand for the first wave of LOTR sets slightly, I still think the large base of LOTR fans will fuel great secondary market sales of all sets of LOTR’s first wave. Additionally, the second wave of LOTR sets includes two awesome, yet-to-be released sets: Pirate Ship Ambush (a ship) and Tower of Orthanc (a mega-build with serious playability and depth). These sets alone should increase the popularity of an already successful theme and ensure the first wave of sets perform well after retirement. Chisel this commandment in stone and put it behind glass!

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"ED"itor's Note: The LOTR theme is a solid investment in my opinion, but the first wave of sets underwhelmed me. I look at the second wave of LOTR sets to be the real investment winners of the theme.

Commandment #10: Thou shalt fear a bubble
Besides Lego’s 50% discount off a certain starship, the possibility of a looming Lego investment bubble is the most hotly debated topic on Brickpicker’s Discussion Forum. I don’t want to rehash whether there may or may not be a bubble, but I do want to discuss how to insulate yourself from the fears of one.

First, it should go without saying that Lego investors should always consider the RAMIFICATIONS of a bubble before succumbing to the allure of 10179-type profits and plowing a bunch of money into Lego sets. Every investor should ask themselves the following questions:

• What is my appetite for risk? Am I prepared to lose money?
• Is this a hobby or is this a job? How much time do I want to spend investing?
• What is my timeline for making profits? Am I in this for quick money, or long term returns?

The answer to these questions should tell you the type of investor you are, and shape your investing strategy. If you have a small appetite for risk, are enjoying Lego investing as a hobby with a small time commitment, and want to make quick profits, your portfolio selections will be much different than someone with a high appetite for risk that is willing to tie their money up for a few years. Those that are risk averse, or fear a bubble, should probably keep their portfolios small for a cycle or two until they’re comfortable with how the Lego secondary market performs, and how small should depend upon your disposable income. Regardless of investment type, the happiest investors always invest with a plan tailored to their specific risk tolerance, activity level and sales duration, and adjust their plan as they learn more about the market and about themselves as investors. In the end, that’s really the only commandment that belongs on the tablet.

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"ED"itor's Note: I wrote an article on this topic almost a year ago(August 2012) and will readdress it in August 2013. I will analyze the data again and make an educated guess on the LEGO Bubble situation at the moment.

As always, invest accordingly.

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I would like to thank Quacs for this quality Blog article and on being the first person utilizing the new Blog feature and tools....Nice job!!!

*Graphic image for title came from bricktestament.com
 

As a child, comics were a part of my daily life. I loved everything about them. I often escaped into the shadows with The Bat, learned with the other Mutants at the school for the gifted. I even tried to digest how a pair of glasses disguised an extraordinary man of steel into an everyday Joe. Comic Books will always have a special place in my heart. Now, fast forward I’m a grown man, a father, a husband, a LEGO fan. Do I read comics? No. That time has long since passed. Though comic books are not a part of me anymore, that doesn’t mean that I have tossed the beloved characters aside like yesterday’s garbage. I absolutely fell in love with Nolan’s Dark Knight Trilogy. And Marvel, they have done a fantastic job with their movies starting at Iron-Man 1. I believe in these movies, they have a purpose. It’s not just a bunch of people sitting in a room trying to figure something to make a movie about. They entrance the audience into a world created by Comic Book Gods. Right now the popularity of The Avengers and each one of the super-heroes is incredible. With Iron-Man 3 in the theaters now and Thor in November, Captain America and Guardians of the Galaxy in 2014 then Avengers 2 and Ant-Man in 2015 this opens up a whole new world of possibilities for The LEGO Group.

It’s no secret that The Avengers is one of the most successful movies of all time. You can’t argue that even if you loathed the movie. Even though Marvel released two Iron-Man movies, one Thor, Captain America and two Hulk’s we didn’t see the Lego sets roll in until The Avengers. Now we have Iron-Man 3 sets. Marvel has a lot on their plate right now, what they are calling a “Phase 2”. What does this have to do with LEGO, you may be asking yourself. Well, it leaves the door wide open for piles upon piles of new Avengers LEGO merchandise! However, before you start thinking ahead we should take a real hard look at what is currently on the market and how it may affect the sets in the future and see for ourselves the investment opportunities (if any) that can be had.

In 2003 and 2004 Marvel previously released some Spider-Man sets to go along with the movie. These sets are now valued at four, five and even six times what they originally sold for. From an investment standpoint, waiting ten years to sell the set isn’t ideal. Now Marvel and LEGO are teaming back up with The Avengers, The Amazing Spider-Man and X-Men to release new waves of sets. Throughout this review we are going to focus only on The Avengers and try and figure out the potential these sets hold for us in the future. In two years The Avengers 2 will be hitting the theaters and a new wave of children are going to be exploring this universe for the very first time. I can tell you right now that 90% of them are going to love that universe! So how does this affect the current sets? Well, in two years these sets are going to be gone from the shelves and only available on the secondary market. Some parents will splurge a little extra to make their “special baby” happy on their birthday, Christmas, Easter, or random Thursday of the year. It doesn’t matter the reason but we can all be sure that for an investor these parents and AFOL are money in our pocket! It sounds harsh, but think about the time and effort and storage you put into these sets, they are simply just paying you a surcharge for all of that plus the original price you paid!

Currently there are ten sets that feature The Avengers in some way. Either from the solo character itself, like Iron-Man 3 or replicating a scene from The Avengers. Ten sets don’t seem like much considering the billions of dollars Marvel is currently making in the entertainment business. With all of the plans for this next phase I project three times the amount of sets that are currently on the market. The good news is, The Lego Group will have to keep up with the movies. Iron-Man 3 may be popular on the shelves now but in November there may be some Thor sets out. Even if there aren’t, there will surely be some Captain America and Guardians of the Galaxy sets out next year. This dramatically affects the shelf life of these current sets on the market. Major retailers like Target and Wal-Mart aren’t interested in carrying “out of date” merchandise on their shelf when the new and better is out.

The most important bit of information from all of the above is that this first round of Avengers and Iron-Man 3 sets will be expiring soon. I suspect, by the time The Avengers 2 hits the theaters in 2015, these current sets will see a spike in price that it will most definitely make your time, effort and storage of these sets worth it!

I know what you are thinking right now. “Mike, these sets aren’t really doing that great right now. There is a ton of them on the shelf.” You’re right! Give it a few weeks, maybe a month after Iron-Man 3 is out and I bet we see an increase in Iron-Man 3 LEGO sales. The Avengers is past due, the only “new” buyers will be the ones who were too young to see the movie when it came out last year. Their over-excitement of the movie will lead them to want the merchandise. I project the prices of The Avengers sets will decrease in the upcoming months as they slowly go on clearance. We have already seen some at Wal-Mart already. Recently, I have found Captain America’s Avenging Cycle for around $7.00 at my Wal-Mart. The boxes are all beat to hell of course. But this is what we are going to see for the rest of this year. The sets will slowly trickle away and little by little new ones will come in to replace. Right now you can tell big boxed stores are trying to get rid of their stock by offering bundles. They are trying to move this product now because they know that, when the next round comes, they can’t afford to have these on the shelves. This is a perfect opportunity for us investors. Collect the sets in bundles and if you need to then sell the non-Avengers sets to help lower the cost even further on the bundle. But, remember “The Wolverine” hits the theaters soon with X-Men soon after and currently there is only one Wolverine/X-Men set out.

Let’s take a quick peek at the current Avengers sets out on the shelves now:  

Marvel The Avengers Collection

Set NumberModelSub-ThemePriceAmount of PiecesPrice Per PieceCurrent ValueCAGR6869Quinjet Aerial BattleAvengers$69.99 USD735 Pieces$0.09$49.66 USD-29.05%

6868Hulk's Helicarrier BreakoutAvengers$49.99 USD389 Pieces$0.12$51.24 USD2.50%

6867Loki's Cosmic Cube EscapeAvengers$19.99 USD181 Pieces$0.11$16.18 USD-19.06%

6865Captain America's Avenging CycleAvengers$12.99 USD72 Pieces$0.18$13.82 USD6.39%

76006Extremis Sea Port BattleIron-Man$19.99 USD195 Pieces$0.10$28.60 USD43.07%

J457GQKR7R25 LEGO investing is becoming more and more popular as both LEGO fans and even some more conventional investors begin to realize that there is more to our beloved bricks than just the fun to be had playing with them. With a little bit of effort, they can turn a tidy profit, as well.

My first experience with selling LEGO sets was when I first discovered eBay. I happened to have a few Castle sets tucked away, and I was delighted to find that I could sell them to eager collectors for an average of three times what I'd originally paid for them. Wow! Now I ask you, how many things have you ever bought that you can say that about? Needless to say, I was very pleased with the outcome.

Fast forward almost twenty years. I decided to take another look at how those same sets are doing on eBay now, with a vague idea that I might like to reacquire some of them. I was curious to see if they were still selling for a premium, or if enough people had since gotten into the act to make even the old sets commonplace and therefore less valuable. I found that although the prices hadn't gone up much since I sold mine all those years ago, they hadn't decreased either. In other words, they were holding their value in spite of there being a lot more people on eBay these days.

This inspired me to take a closer look at LEGO investing. I figured, if nothing else, I could justify buying a couple of the new Lord of the Rings sets by telling myself I wasn't really spending lots of money -- I was investing it. In the process I discovered that there are other options available besides buying sets and then waiting several years for them to appreciate in value before reselling them for a profit. What I’ve learned was the inspiration for this article.

What are your goals?

Before we get into the different ways you can profit from investing in LEGO, it's important to understand that how you measure your success as a LEGO investor has a lot to do with what your goals are, both as an investor and as a LEGO fan. With that in mind, I want you to ask yourself a few questions:

• Do you want to start a part-time or full-time business?
• Do you simply want to make enough profit to pay for your LEGO hobby?
• Do you collect as well as invest?
• Do you like to build sets according to the instructions, or do you prefer to design and build your own models (MOCs)?

There are no right or wrong answers to these questions, but answering them honestly for yourself will help you decide which approaches to LEGO investing will fit best with your personality and needs. I think you'll find it helpful to keep this in mind as you continue reading.

Many people are familiar with buying and selling complete sets. However, that's only one way of making a return on your investment. A second approach is to part out the sets. Let’s look at each one of these methods from an investment standpoint and see if one is superior to the other when it comes to turning a profit.

Selling complete sets

This is perhaps the simplest and most straightforward form of LEGO investing. You buy a set at the best price you can find (every dollar you save off retail is another dollar of profit), and then hold on to it for from several months to a few years and wait for it to appreciate.

Most serious investors keep the sets they buy for investment purposes MISB (mint in sealed box) to reap the maximum profit. That's not to say that you can't also sell sets you've opened and built, but as a rule they won't be worth quite as much as they would be if you kept them pristine. As a compromise, you can buy one set to build and extra sets to store away as an investment. Many use this as a way to make their LEGO hobby self-funding.

So, what kind of returns can you expect? It varies. Some sets have had exceptional returns (see Table 1), while a few others have actually lost value (see Table 2). Most fall somewhere in between these two extremes.

Pros

This is the simpler form of investing. You buy a set and put it away to appreciate. You have to put some thought into choosing the set(s) most likely to go up in value, but other than that there isn’t a lot of work to do until you get ready to sell it. Even then, one box is easier to deal with than 100 small orders.

Cons

It takes a lot of patience (and storage space) to buy and store away all those sets for months or even years. There’s always the temptation to want to open up and build one, and the worry that something might happen to them. Plus, a lot of the value of the set depends on the condition of the box, and it isn’t always easy to get a perfect box, what with shipping mishaps and the like.

It's beyond the scope of this article to go into all the ins and outs of choosing the right sets to invest in. Let me just say that even if you're already certain you only want to trade in complete sets, I suggest you continue reading anyway. One way the investment potential of a set is determined is by looking at how many unique parts are in it and what those parts are worth if sold separately. In the next section, we'll take a closer look at that side of the market.

Parting out & splitting sets

Dividing up a set and selling off the pieces actually falls into two categories: parting out, and splitting.

Parting out means listing and selling each part from a set individually. This is usually done through Bricklink.com. Bricklink even has a handy tool that allows you to enter in the set number, and it will list all the parts from that set for you so you don't have to enter each one individually. Parting out is probably the best way to get maximum value from a set, although there are drawbacks to this method, which we will discuss shortly. Bear in mind that the sets which earn the most money from being parted out are the ones with the most useful and/or unique parts, like the modular houses, or any of the other large, adult-oriented sets.

Splitting a set means dividing it up into its component parts, rather than into individual pieces. For example, you could take the Uruk-Hai Army set (#9471), and list the wall in one eBay auction, the hook shooter in another, the Eomer figure (with or without his horse) in another, and so on. This is less work overall, because you are selling a few chunks of a set rather than hundreds of individual parts.

Pros

Like an old car, the parts in a LEGO set can usually be sold for more than the value of the set as a whole. Also this value can be (theoretically) available right away, instead of having to wait months or even years for the set to go EOL (end of line) and start appreciating in value.

To see whether this holds true over time, I gathered data on sets that were still in production as of the writing of this article as well as the same retired sets we looked at previously (see Tables 3, 4, and 5). As you can see, some retired sets are actually worth more MISB, though not by much. It's also worth noting that even if a MISB set turns out to be a loser in the secondary market, you can, if you choose to put in the effort, still recoup your investment by parting it out.

Cons

The downside of parting out sets is that it's much more time consuming than selling it whole. You have to sort the pieces and organize them in a way that you can easily find them again when you start getting orders. And each of those orders has to be picked, packed and shipped, plus you have several transactions to keep track of instead of just one. It's also very likely that you won't sell everything immediately, which means it still may take time to turn a profit. And some parts may not sell at all; experienced LEGO sellers report that they usually end up with a lot of "odds and ends" left over. (None of these issues is necessarily a deal-breaker. Just make sure you go into it with your eyes open.)

Combining collecting with investing

Some LEGO investors prefer to sell off only part of a set and keep the rest for their own collection.They may, for example, sell the minifigures from a set and keep the rest of the parts. This is often done when they find themselves with duplicate figures which would be redundant in a display, or when they're looking for a less-expensive way to add to their stockpile of parts for building MOCs. Experienced collectors estimate that by doing this, they can recover from 50-75% of the cost of the set -- or even 100% if this technique is combined with buying the set at a discount.Those who like to collect minifigures can do the opposite, buying a set for the figures it contains and then selling off the other pieces to help offset the cost.Either way, this can be a great way to make what is otherwise a rather expensive hobby more or less self-funding.

Factors to consider

Choosing which approach to LEGO investing is right for you involves several factors, of which profit is only one (and some would argue not even the most important one). It's a decision each LEGO investor must make for him- or herself. Here is a list of the main factors you'll want to consider when deciding whether to buy and hold complete sets or sell the parts.

Temperament - Some people enjoy building each set exactly according to the instructions, while others prefer to build MOCs. Which type you are will influence how you feel about splitting up a set versus keeping it intact. There's nothing wrong with taking your own preferences into consideration. This is supposed to be fun, after all, so why force yourself to do something if it makes you uncomfortable? In the long run it isn't worth it for a couple of extra bucks.

Time - Sorting, storing, listing and then packaging and shipping all those thousands of individual parts can be quite time-consuming compared to selling whole sets, and you have to be able to keep up with the work load so that you get the orders shipped out in a timely fashion. It's a good idea to divide the amount of profit you're making by the number of hours you're working to get a realistic picture of what you're actually earning.

Timing - If you want to make a profit on a MISB set, you usually have to wait for that set to appreciate in value. If you part it out, you can realize a profit right away (maybe). You'll also want to keep a close eye on the market as a whole to help you determine the best times to sell particular sets.

Your goals - If you want to invest in and sell LEGO sets as a business and your primary goal is to make money, then you may actually enjoy the work involved with running a store selling parts. A LEGO business certainly sounds like more fun than a lot of other things you might do for a living! On the other hand, if your main goal is to help fund your own LEGO collection, that's another reason to keep an eye on the amount of your free time each method takes up. You don't want to spend so much time on the business that you have none left to build your own sets.

Space - Many investors prefer to focus on only the large sets because that's where they can make the highest amount of money for the least amount of work. However, you need to remember that you're going to have to store all those big boxes somewhere, perhaps for years. Not only will they be taking up closet space, you'll need to take steps to make sure they're safe from hazards such as water damage, mold, insects, fire, and even curious children. Do you have enough space in your home to store enough product to make the business worthwhile (with "worthwhile" being relative, depending on your goals)? You can always rent space at a storage facility, but the added expense will eat into your profits. If, on the other hand, you plan to part out sets, you'll still need space to store and organize them, as well as workspace for sorting the parts and filling orders.

Patience - If you choose to hold onto a set, do you have the patience to wait for it to appreciate? How about the self-discipline to resist the urge to open and build the set? If you don't, you may want to look for ways to flip the set more quickly.

Opportunity cost - Every dollar you have tied up in your LEGO inventory is a dollar that isn't available to spend on something else. Do some research. How long does it take for a set to appreciate compared to how long it takes to sell all the parts of that set? The same principle also applies to time. Every hour you spend sorting parts and picking orders, or worrying about the safety of the sets in your basement, is an hour you aren't spending doing something else.

Knowledge -- a LEGO business is still a business. How much do you know about how business works? Are you good at managing money? Do you enjoy tasks like record keeping and market research? Answering these questions doesn't necessarily help you determine whether to sell sets or parts, but it's a factor in deciding how large and/or complex you want your business to be -- or whether you really want to turn your hobby into a business at all. ConclusionI hope this article has given you a clearer picture of what your options are as a LEGO investor, and the information you need to make an informed decision based on your own situation.One final thought: Sure, you might be able to make more money with less effort by picking up overtime at work. But isn't life too short to spend it doing something you hate just to make money, when you could be surrounding yourself with LEGO instead?And if you can do both at the same time – jackpot!

“ED”itor's Notes There is often talk on these and other LEGO sites about a possible LEGO “speculation bubble.” LEGO fans and collectors alike wonder if the good times in LEGO investing will come to an end with the implosion of the LEGO secondary market, similar to the Baseball Card market of several years ago and its tremendous collapse. Well, I, for one, have always argued against the speculative bubble theory. Why? The main topic of this article...parting out LEGO sets for resale, is the main reason why I don't believe there will ever be a complete collapse of the LEGO secondary market. There is a value to each and every new LEGO piece produced. There will always be value to these little plastic bricks...for MOCs mostly, if there continue to be LEGO fans. Unless LEGO starts mass producing individual pieces for sale at a super cheap rate, the parting out of new LEGO sets will be a viable option to make money for the LEGO collectors and investors out there. Even if a LEGO set depreciated well under MSRP, most LEGO sets can be broken down into parts and resold for at least what a person paid for it. There is an inherent value to them there bricks, so the LEGO sets that perform poorly still have a respectable value associated to them. This could not be said for Baseball Card, Beanie Babies or any other collectible's markets that imploded. Many of those collectibles became worthless after their bubbles burst. That should never happen to a LEGO set in my opinion if The LEGO Group continues to produce sets and bricks in the same ratio and price range that they do now.

On the topic of “parting out” LEGO sets, my own personal feeling is that it is a ton of work for the money, yet it remains a viable income source for many LEGO fans. It's tedious, time consuming and require individuals that are willing to painstakingly sort and store thousands upon thousands of LEGO bricks. If you actually calculate an hourly wage from parting out LEGO sets, it would probably equate to a minimum wage job. While this may be acceptable to many LEGO collectors, I would prefer to gamble and invest in complete, MISB LEGO sets. The parting out process does give a fallback solution in case of a severe depreciation of a LEGO set though. I am not writing off the LEGO parting process as a waste of time or effort. The entire Bricklink community and MOC world benefits from the process and many Bricklink stores probably do make a decent return on their efforts, but from a personal standpoint, I am a person with limited time for such endeavors and the investing in sealed MISB LEGO sets is my choice of LEGO investment. Bottom line is this...to each his own. If you are patient and enjoy the repetitive nature of sorting and separating thousands of pieces, then LEGO parting is for you. If you enjoy the quick strike nature of buying and flipping MISB sets, then I would recommend against it. Both methods can make you money, it's all a matter of preference.
 

Building your eBay Profile
There are a lot of sketchy sellers on eBay, and one of the best ways to avoid being lumped in with these types is to have a solid eBay profile. For all you new users/investors visiting the site every day, don’t forget that buying the Lego is the fun part, but selling is where you actually make the money. I too love the rush of getting a great deal or discount on a set, but until I’ve taken photos, made the listing, found a buyer, packed it up and shipped it, it is just potential profit. So let’s say you have some sweet sets to sell this upcoming holiday season, but you are relatively new to selling – my advice is to not wait until October to try and build your reputation, but start now!
If you are really serious about making money, and you are willing to start now, you can try to reach Powerseller status so that when you do sell some sweet Imperial Shuttles you’ve been sitting on, you’ll sell them more easily and keep more of the profit for yourself.

Becoming a Power Seller
What is a Power Seller?

I am aiming to be a global Powerseller. I know a lot of new members are from around the world, and this will probably apply to you. Those looking for strictly the US Powerseller levels will not find them here, although the advice still might be helpful!

I long for this designation. I’m sure that some of the other members on here have their own experiences to add, but I’ll fill you in on mine. The basics: You need 100 transactions and $3,000 in sales over a twelve-month period. (You can check your progress through the Account - Seller Dashboard) The benefits are sweet: you get a percentage of your fees back – up to 20%. You also get better visibility and a badge by your name, which might give buyers a better reason to bid on your auction compared to similar priced auctions.

From my Seller’s Dashboard:
Basic PowerSeller requirements: 12-month rating: (Mar 2012 to Feb 2013)
Minimum global sales and transactions ($3,000.00 and 100 transactions)
I mentioned that you can get up to 20% OFF fees from eBay if you are a PowerSeller and/or Top Seller. An eBay Top Seller is another designation in which you can save on eBay fees and gain other perks. Although easier to obtain the Top Seller status, it still requires a plethora of sales and top service to eBay buyers. Both the requirements for Top Sellers and PowerSellers are similar, but PowerSellers require more in the way of transactions and sales...triple the amount in fact. Here is the information on Top Seller status and PowerSeller status directly from eBay:

Top Seller (Plus):

To become a Top Rated Seller, you need to meet the following performance requirements:

• Have an eBay account that's been active for at least 90 days.
• Have a positive Feedback rating of at least 98%.
• Have at least 100 transactions and $1,000 in sales with US buyers over the most recent 12-month period.
• Upload tracking to your buyer's My eBay within your promised handling time for at least 90% of your transactions with US buyers in the last 3 months. Details below:
• Handling time is measured by business days. Weekends and holidaysaren't counted
• For example, if you specify 1-day handling time and a buyer pays for an item on Tuesday, you have until 11:59:59 PM Pacific Time on Wednesday to upload a tracking number. For a buyer's payment on Friday, Saturday, or Sunday a tracking number must be uploaded by 11:59:59 PM Pacific Time on Monday.
• If a buyer purchases items from multiple listings, each listing (transaction) must have a tracking number associated with it. This is required even if each of the listings have been combined into a single order for shipment.

Note: Sellers are not required to upload tracking for the following scenarios:

• Unpaid items or canceled transactions
• Transactions using freight or local pick-up as the shipping service
• Classified Ad format listings

Meet the following requirements for detailed seller ratings (DSRs):

Notes:

• Sellers with 400 or more transactions over the past 3 months are evaluated on their transactions with US buyers from the last 3 calendar months. For all other sellers, the rate is calculated from transactions with US buyers over the last 12 calendar months.
• To measure your overall performance accurately, we count 1 and 2 ratings only if they come from 2 or more buyers within any given evaluation period. If you have more than 400 transactions, 3 or more buyers must leave low detailed seller ratings before they are counted. Also, if the same buyer accounts for more than 80% of your 1 and 2 ratings in a single category, we will only count one low detailed seller rating from that buyer for each applicable category.

Meet the following eBay Buyer Protection and PayPal Buyer Protection cases standards:

Notes:

• Sellers with 400 or more transactions over the past 3 months are evaluated on their transactions with US buyers from the last 3 calendar months. For all other sellers, the rate is calculated from transactions with US buyers over the last 12 calendar months.
• To measure your overall performance accurately, we count cases only if they come from 2 or more buyers within any given evaluation period. If you have more than 400 transactions, 3 or more buyers must open cases before they are counted.

eBay may, at its sole discretion, temporarily grant Top Rated Seller status to an account even if it does not otherwise meet the requirements at the time of evaluation. This may be as a result of loss of Top Rated Seller status due to eBay or PayPal site outage, natural disaster, postal strike, or for any other reason that eBay may determine makes a temporary status change necessary.

Top Rated Plus

To qualify for Top Rated Plus, listings need to meet the following requirements:

• Sellers must meet all of the requirements of a Top Rated Seller listed above.
• Offer a 14-day or more, money back return policy.
• Offer 1-day handling.

Receiving the greatest benefits on your listings

By meeting the performance requirements above, a Top Rated Seller will receive some additional exposure in Best Match. In addition, listings from Top Rated Sellers offering a 1-day handling time and a 14-day or more return policy with a money back option will also receive:

• A Top Rated Plus seal on qualified listings
• The greatest, on average, advantage in Best Match search for fixed-priced listings
• A 20% final value fee discount on the item's sales price (not including the shipping cost)

Listings in the following categories must offer a 1-day handling time to qualify for the 20% final value fee Top Rated Plus discount, but do not have to accept returns:

• Bullion > Silver
• Bullion > Gold
• Bullion > Platinum & Palladium
• Gift Cards
• Tickets

Listings offering a freight shipping service must accept returns, but will not be required to offer a 1-day handling time to qualify for the 20% final value fee Top Rated Plus discount.

Listings within the Real Estate and Specialty Services categories, as well as listings that offer local pick-up only, aren't eligible for the additional benefits.

Note: Offering a 1-day handling time or accepting returns is not a requirement of the Top Rated Seller program. However, it is a way to maximize the benefits you receive by qualifying for Top Rated Plus. For any listing to receive the Top Rated Plus seal, both a 1-day handling time and 14-day or more return policy with a money back option must be offered. No exceptions apply.

Most listings that meet the requirements will show the Top Rated Plus seal within minutes of creating or revising your listing. However, there may be times when it may take up to 3 hours to process. The delay in the seal appearing does not impact your search placement. Top Rated Plus listings will continue to receive, on average, increased search exposure.

Top Rated Plus best practices

Follow these best practices to make sure you're prepared to meet buyer expectations for the 2 key services that earn you the top rewards:

• Make sure you can fulfill your orders within the time promised and fulfill orders within 1 day when possible. To help ship items out quickly, you can use free carrier pickup (for Priority or Express Mail) with USPS and save yourself a trip to the post office.
• Upload tracking on all of your orders. Use eBay label printing to automatically upload tracking to eBay. USPS Delivery Confirmation for First Class Package service is free when you print labels on eBay.
• Offer a return policy that is 14 days or longer. Learn more about creating your return policy and get tips on how to set a clear return policy. Return policies must allow for "buyer's remorse" returns, although sellers may specify that items must be returned in original condition or charge a restocking fee for items returned opened or used.

PowerSeller:

PowerSellers enjoy special benefits, including:

• Unpaid item protection which offers credit for certain listing upgrade fees on eligible listing formats
• United States Postal Service (USPS) savings program
• United Parcel Service (UPS) rate discounts
• Promotional offers
• Opportunities to participate in research
• USPS Commercial Plus Savings for Platinum and Titanium Powersellers
• Powerseller discussion boards
• Powerup print and email newsletters
• Health Insurance solutions

What are the requirements?

To qualify for the PowerSeller program, sellers need to consistently sell a significant volume of items, provide a high level of service to their buyers, maintain a positive Feedback score, and meet the requirements for detailed seller ratings and eBay Buyer Protection and PayPal Buyer Protection case standards. Membership in the program is free.

You don't need to apply for the PowerSeller program. If you qualify, you'll automatically be included. Just check your Seller Dashboard to see if you've achieved PowerSeller status. PowerSeller levels include Bronze, Silver, Gold, Platinum, and Titanium depending on the number of items you've sold or the dollar amount of your sales.

If you're not a PowerSeller yet, you can always work your way up by meeting these requirements:

• Be registered with eBay for at least 90 days.
• Have an account in good standing.
• Maintain a positive Feedback of 98% or higher over the past 12 months.
• Follow all eBay policies.
• Have a minimum of 100 transactions and $3,000 in sales with US buyers over the past 12 months.
• Receive at least a 4.60 average from US buyers across all 4 detailed seller ratings (DSRs).
• For all transactions with US buyers, have no more than 1.00% of transactions with low DSRs (1s or 2s) on item as described, and a maximum of 2.00% of low DSRs on communication, shipping time, and shipping and handling cost.
• For all transactions with US buyers, have no more than 1.00% of transactions result in opened eBay Buyer Protection and PayPal Buyer Protection cases, and no more than 0.30% of transactions result in closed cases without seller resolution.

If your account falls below these requirements, you may lose your PowerSeller status.

Here are the various levels for the Powerseller status:

My problem? Plenty of sales, not enough total transactions – this is great for my overall profits per transaction, but I’m missing out on some advantages of being a power seller.

My solution in theory? Polybags. Well, polybags, small sets and minifigs. My solution in action: I purchased a lot of 10 x 30210 (Frodo’s Cooking Corner) for an average price of just under $3.25 delivered. As soon as they are in my possession, I’ll list them separately and try to build my number of transactions on these smaller polybag auctions. I’ll keep you posted as I head towards becoming a Bronze Power Seller. There is plenty of extra information on Power Selling and such on your eBay dashboard. This is just enough to get you started. If you want to sell big in the future, you need to build a foundation now!

Most Recent Acquisition: 2x Summer Riding Camp @ $82.50 each

Wife (Pregnant) Anger Level: 5 – I sold two sweet posters this week on the ‘bay so the wife is pretty pleased to get more poster tubes out of the house. Plus she likes the look of Friends LEGO and is giving me the okay to get some. I can deal with a 5, people!

I certainly have zero experience as any sort of seller on eBay. In fact, I have never sold anything on eBay. I have never sold any LEGO set in my life, so I might not be the best person to give advice on this issue. From a layman's standpoint, it looks like there are a ton of advantages to the eBay Powerseller program, but it looks like a lot of sales and work. For most LEGO resellers and investors, the Bronze Powerseller tier looks obtainable, but there is a huge jump to Silver. At $36,000 sales a year, we are no longer talking about a side hobby or part-time job. The major advantage of the Powerseller status is one that eBay does not promote, yet pays dividends every day, it's an under-the-radar advertisement for the eBay seller. I, for one, appreciate when I see an eBay seller with a Powerseller icon because I know that the seller is legitimate and I'm confident that the deal will most likely go smoothly. Of course, there are exceptions to every rule and some eBay Powersellers can have bad sales, but I have never had an issue with the hundreds of Powersellers that I have bought from in the past. Why? I guess because it is very hard to acquire the designation and these experienced sellers know how to list, market, package and ship items for sale on eBay. The Powerseller badge works as a promotion in a way. Many buyers feel the same way I do, so when comparing two comparable items for sale from two different sellers, I will go with the Powerseller or Top Seller designation more often than not. So while I cannot give you any key insider points on being a Powerseller, I can tell you as a Powerbuyer, that I think highly of the designation and prefer to buy from Powersellers, over the regular eBay sellers.“Ed”itor's Notes:

A new category in our Brickvesting Blog, BRICK BRATS: The Teenage LEGO Investor's Blog, will share some of the thoughts and words of some of our younger BrickPicker members. It will be a feature that we will share from time to time with the entire community. LEGO investing is a growing phenomenon that crosses all walks of life and different generations as well. The younger crowd might be able to teach some of us old dogs, some new tricks...

Our inaugural set of articles are combined into one big release. They were written by Darth LEGO and Comicblast. I hope you enjoy them and please feel free to comment on them afterwards...

TOYS R' US: The Good, the Bad and the Ugly...

By Darth LEGO

You walk into a Toys R' Us(TRU) one day and you see Jabba’s Palace, set 9516, on the shelf. You then look at the price. Your eyes nearly pop out of your head...$164.88! You then look at the other sets and almost all of them are overpriced. Why would a retail store do such a thing? Well, I’m going to try to explain why Toys R' Us would do such a thing and discuss some of TRU's other sales practices and whether they are good, bad or even downright ugly!

The Good

BOGO 50% off!!! I know many members on the BrickPicker site like TRU's Buy One Get One(BOGO) policy. It makes paying prices over retail a little bit easier to swallow. TRU consistently run specials of BOGO 40-50% off.

Here is Popalzai’s comment from a thread...
“For me TRU BOGO rocks...Especially when you live near NYC...Because in the NYC TRU stores they have BOGO on all the sets, including large sets like Death Star...SSD...Tower Bridge ETC...What I have noticed is that they did not hike the prices on large sets…SSD and DS were at $399...I even saw a Haunted House for $169.99 and BOGO...I think with BOGO and retail price, nothing else matches TRU!!” (Link to post: Click Here)

Here is Hxckid88’s post...
“BEST DAY EVER….Got Helms Deep for $90.00. I didn't have to argue with them at all...they price matched. I also got 6 Minecraft sets. They didn’t even check the ad. I simply stated I can get this set cheaper somewhere else and they said OK. One can only speculate what a dishonest person would have done. I then went to the other TRU where I had the exact opposite situation as the manager was difficult to deal with. That’s the ever brief Cliff Notes version of my find, as I’m too lazy to type everything that transpired, but it was quite a day. ALWAYS talk to a manager, you never know what they may do for you. Just hone your approach, have a game plan and be polite.” (Link to post: Click Here)

Popalzai’s comment brings up another great point. Toys R' Us has larger sets for sale than other retail large brick and mortar stores(not online), like Walmart or Target. This fact makes the BOGO deal even sweeter for us LEGO investors and collectors. This is also convenient for people who don’t live near LEGO stores(...which usually carries the larger sets). I think you can find some good deals during BOGO, especially on higher priced items that are close in price, which enables you to maximize discounts. Now we will get into the bad sales practices that Toys R' Us exhibits.

The Bad

Item is damaged during shipping.
I’ve ordered only once from Toys R' Us and it was from their website. The box came so beat up the actual Lego box had a gaping hole. It was absolutely horrible and they even wanted me to pay to ship it back. I ended up returning it at a store. I know this can be a problem anytime you ship something from anywhere, but I paid $15 dollars to ship it and they put only one thin layer of bubble wrap around the set.

Here is Talon’s comment about an order not nearly as bad as mine, but still wasn’t satisfactory.
“So today I received the two 7965 Millenium Falcons that I had ordered from TRU (@$99) and NO shipping damage. But, and a BIG BUT, one of them has a hole poked in the front about the size of a finger. It obviously occurred before shipping. It was sent from a fulfillment center in OH. Now I need to decide if I am going to build that one or not. I had no plans to build one in the near future but you never know. Unfortunately, I have to decide now because I will have a limited time to return it. Gotta love TRU!” (Link to post: Click Here)

This is another example of bad practices during the fulfillment of online orders. The only way to avoid this problem is to go to a store and pick out the perfect box, which for many people is not possible. Also, brick and mortar stores don't carry every LEGO set. Like I stated earlier, Toys R' Us is not alone with poor packaging techniques. Amazon, eBay sellers and even LEGO itself messes up occasion, but TRU's customer service is the weakest of all major LEGO retailers, so a simple return becomes a major hassle.

Poor Customer Service (Not receiving conformation emails or reward points.)

This is just poor management from the executives on down. They should care enough about their customers and give them at least okay customer service. When customers don’t receive their order conformation emails, they are left to wonder if they will even get what they ordered.

TheDarkness had this problem...
“…I have placed 2 orders for TRU under their latest deal. My credit card has been charged, yet I haven’t received a confirmation email for either. Neither order show up on my account. I have sent off an email, but have heard that TRU are useless with their customer service…”

This is a major problem for people. Sometimes TRU might just cancel your order out of the blue without giving you any reason why they did so. Another problem is people not receiving their reward points after purchasing from TRU.

Stackables had this issue.
“I have to get this off my chest. I have made 2 purchases over the last 2 weeks and have not received any reward points. TRU is also running a promotion where you get 10% back and double reward points if you use the TRU credit card.

I called them 6 days ago to report the issue. Of course the person I talked to couldn’t do anything and forwarded everything to corporate. She told me to wait 5 days. 5 days have passed and in the meantime, I placed another order. Which, of course, I didn’t receive rewards for that order either.

That brings us to today. I called, gave them my reference number and told them about my new order problem. The ordeal sent me to 5 different TRU customer service people, 5!!!! Nobody could really help me. Finally the 5th person I talked to said she was going to send the report to the “Rewards” people or something and wait another 5 days. I assume this was probably already done. Absolutely pathetic. I better get something more out of this fiasco.

I have no clue why I keep dealing with them.”(Link to post: Click Here)

This shows their customer service is a wreck. You shouldn’t have to call them five times to get something done about a problem. Amazon would fix any problem with their transactions almost immediately. TRU needs to step up their game big time if they want happy customers.

The Ugly

This is probably one of the worst stories I’ve heard about rude employees.

Let’s look at Mushedroom’s incident...
“So...I was on the hunt for G.I. Joe Kre-O figs and then got swooped up by some LEGO sets that I hadn’t seen in my local TRU. The Hawthorne location was a store that had a lot of what I was looking for. BUT…What I didn’t realize or know was that there is a caveat with shopping at the Hawthorne location…they are an experimental “bump up” store, where they actually charge more for EVERYTHING! So everything I had purchased was marked up!

I didn’t understand why this was the case and immediately I was greeted by a supervisor with a really bad attitude. I inquired about why the prices were different and I even produced a receipt from a different TRU displaying the differences in prices for the minifigs, various small LEGO sets and Kre-O items that I bought at 2 other TRU’s before coming to this store and then asked for price adjustments for all of the items I was buying. One of them was a sealed case of minifigs. They grabbed me one and this woman opened it, even after I requested her to not do so, and then half-yelled at me saying she needed to count each out. I told her there were 60 in each sealed case. She even had an opened case on the counter…with all the info she needed but she was being a jerk and opened 1 side of the box, until the supervisor told her to use the already opened one. Then I asked for the empty factory shipping box and she practically threw it at me and all the while she had this vibe about her like I was some kind of badgering/bickering parent and she was a pissed off teen filled with angst…

After she disrespectfully threw the box at me I got upset and firmly called her attention and asked her flat out, “Are you having a bad day?” She responded with, “No, I'm fine. I don’t know what you mean.” And I fired back with, “Because this...ALL OF THIS…“I can’t be bothered with” attitude isn’t working for me and I don’t appreciate your attitude. I'm about to spend over $300 here and you’re acting like my business is unwanted here. Is this the case?” That’s when a supervisor came over and said, “I'm so sorry. Do you want another case of minfigures? I can get you one.” He started to call the back. I told him no, it's OK, but that I was looking for Walking Dead figures, so he took me to a section in the back and I found some. While in the back I asked him what her problem was and then I laughed because she was a supervisor. He told me that he was her supervisor and apologized for her behavior and then told me to call him whenever I needed anything. I grabbed up about 12 figures and walked back to this woman. Meanwhile she had been price adjusting everything and then began to apologize for her behavior.

I'm not one to kick a dead horse so I let it go, but I was seriously shocked at how POORLY this person acted and she is supposed to be the example of what this corporation is trying to achieve in GOOD CUSTOMER SERVICE. At the end of it all, she had price adjusted everything and again apologized for her attitude. So all in all, I got what I came for, received discounts and price adjusting and even got more items than I was expecting.

Bottom line…

DON’T TAKE ANY KIND OF ABUSE FROM TRU EMPLOYEES. But at the same time, DON’T OVERREACT emotionally. Handling a situation with reserve and poise serves to be a better counterattack.” (Link to post: Click Here)

This is pretty sad. If TRU ever really wants loyal customers, they have to start with the employees that directly deal with the customers. Maybe the supervisor was having a bad day, I really don't know, but these stories are far too common to ignore. The customer will probably not come back if you treat them like the lady did.

At least he ended up getting what he wanted. I truly believe this is one of the ugliest things about Toys R Us.

The main ugly issue I have with Toys R' Us is price gouging. They do it because they can hide it with their BOGO offers. Many LEGO sets are marked up 20% or higher over LEGO MSRPs. But if you can find a location with some large sets close to MSRP, then the BOGO can be an effective way to save some money.

Conclusion

In conclusion, TRU is generally thought as a bad place to shop. However, many of us shop there for the BOGOs. Many of us LEGO investors are on the fence about buying from Toys R Us. I am in that boat as well and I’ll tell you why. They make the slightly overpriced sets worth it and you can get the bigger sets like the modular and USC Star Wars Sets. They also have nice deals during their BOGOs. I believe I would have a better experience from TRU if I went to a store and I’m willing to give them another shot. Let me know about your Toys R Us experience in the comments below. Good luck investing Brickpickers! – Darth Lego

“Ed”itor's Notes: I have to say that I agree with a lot of points that Darth LEGO made about Toys R' Us and its business practices. Their customer service is weak at best and their prices are usually MSRP or higher. That being said, you can find a very good deal with patience and some research. I bought two 10188 Death Stars a year back on a BOGO 50% off deal. Basically, I paid $300 each for the $400 sets. Not a bad deal. Let's take a look at Darth LEGO's second article..

The Magic Number: Investing in LEGO Sets on Sale

By Darth LEGO

We have all probably had this experience. Waiting and waiting for a good deal on a LEGO set and then before you know it, poof...it's sold out. Now you are left without that set you wanted to invest in and few options other than paying more than the retail price from the LEGO secondary market. I'll try to lay out some tips on when to buy a set and at what price(and % off) when there is a sale...

*** Please note that these tips vary from situation to situation and set to set.***

0-20% OFF: Only get a couple if you are certain it will retire in about the next 6 months or it is in the process of being retired or EOL(End of Line).

*** Monster Sets other than the Haunted House might fall into this range if it EOLs this Summer. ***

11-30% OFF: Once you start getting higher in this range, most LEGO sets are good buys. Just be sure that you won't be able to get it cheaper later.

*** Amazon Lego deals are usually in this range. ***

31-50% OFF: Any LEGO set is basically solid as far as investing goes. Don't wait too long so you don't miss out on the deals.

51%+ OFF: Always buy. You can't go wrong at this % and higher.

So what's the Magic Number(% off) so you won't be left empty handed or buy it too early before the real deals are enacted? I would say 30%. It's not too low so it leaves you more margin for profit, yet it won't probably sell out too fast, enabling you to get at least a couple of them. Themes like Star Wars and Lord of the Rings are going to be more popular, thus making some great deals, harder to find. Some City and Creator sets are more likely to have better deals. How well certain sets sell can vary from store to store which can affect deals on different themes. For example, my local stores always sell their Star Wars stock, but they have consistently had clearances on their Harry Potter and Ninjago sets because they just don't sell in my area. Where you live could be a totally different story and that makes a "good deal" sometimes hard to agree on.

In conclusion, everyone is going to feel different about when to buy a set. I'm just trying to lay out my personal guide and if you guys have any more tips/experiences, please feel free to share them below. Happy investing Brickpickers!

“Ed”itor's Notes: I usually use our Amazon Discounts Page as a good place to start finding deals. A set will catch my eye at 15% off. Then I really start to pay attention at 20%. I usually buy any and all sets 30% off and more, even if I hate the theme. Now, there are some popular sets like the 10228 Haunted House that will just not get discounted that much, so I will have to pay close to retail for that set. I did buy a few 10228s during LEGO's Black Friday's deal for 10% off plus free shipping, so that was a bonus. Just don't wait too long or within a week of being retired, you will be paying 10% or more on a LEGO set that was just on sale. Last but not least is Comicblast's article. Let's check it out...

Out of the Mouths of Babes: Teen LEGO Investing

By Comicblast

Before a person becomes an investor, he must first ask himself, “What am I interested in?” and “What is going to make me some money?” Common answers would be stocks, precious metals, like gold or silver, or even baseball cards. One day I brought this up with my older brother. I asked him, “Do you think I should invest in LEGO bricks and baseball cards?”

He replied, “In 20 years, no one will be interested in cards anymore. I think that people will still be interested in LEGO bricks in 20 years. Plus, it doesn’t take as long to make some money.”

Smart man...
As many others here on BrickPicker and others throughout the LEGO world, I discovered LEGO bricks upon my 3rd birthday. Now, three might seem like a young age to start playing with LEGO sets, but you see, they weren’t mine. I would grab a brick or two here and there from my older brother’s collection to make my own. At first they started out small, making a “camera” out of a door and window with a flat piece connecting it. Now that I am 13 years old, I have made much more large scale creations and MOCs, one of my proudest being my own version of Jabba’s Palace that I constructed for a contest, but forgot to submit.

From Building to Collecting…
I have heard numerous parents complain about LEGO bricks being “pricey” and saying that they don’t buy very many LEGO sets for their children because “once they build it, they take the little people and then put the set to the side, basically wasting my money.” This sounds very similar to the experiences of my family. I started out with small bits and pieces from other peoples' collections and eventually received my own set at the age of 6. This was just a little police car and oversized minifigure(everyone remember those Lego minifigs that have “3 stud butts” as I call them?). I probably played with this set for a couple weeks and then set it aside when I got another one and another and another. Soon the sets weren’t in any particular order and were just lumped together in a couple totes.

From Collecting to Investing…
Because parents also have made an “investment” into these sets, they are reluctant to throw them away. You, yourself are reluctant because they bring back memories. This basically leads to massive hoarding of LEGO bricks in the attic, basement, under the bed, and between the seat cushions on the sofa. Just like many of the other children across the world, I played with LEGO bricks at least once every couple months. Sometimes my building area would occupy the living room and kitchen, and other times, it would occupy my room. After awhile though, my LEGO-ing took a different turn.

Now, 11 years old, I wanted the LEGO sets that I wanted and rarely took “no” as an answer. Spending 5 hours a day, looking at eBay listings, with the search term, “lego star wars,” isn’t exactly the life your parents wish you to have, but they somehow persevered.

I am not exactly sure if this is how other parents are, but my parents soon began to limit the amount of “screen time” that my siblings and I could spend on a computer for recreational reasons. They were also very picky about my buying. One of the only ways that I could get my parents to give me permission to buy a set was by opening at least 5 different tabs of the last couple sales for that set. Looking at trending patterns of sets allowed my parents to figure out if I was spending my money well. Another way that I persuaded them to allow me to buy was by saying how good of an “investment” it was to buy it at that moment. Then I, of course, didn’t know a thing about investing at all, but I figured it was a big word and I had learned from debate team, that big words make you sound smart, only if you know what that word means. I was learning about supply and demand in Social Studies class, so I included terms like “annual return rate” and “capital gains” into my conversations, which promptly led to me being allowed to buy more freely.

This past year, we were staying at a hotel and we received a complimentary USA Today newspaper every morning. As most of us know, that was the fateful day that BrickPicker was on the front page of the financial segment of the newspaper. On the front page were the smiling faces of Ed and Jeff Mack. Two days later, I joined the ranks of many new investors of MISB (Mint In Sealed Box) sets.

The Afterword…
If you are reading this, you most likely are an AFOL, Adult Fan of Lego. You may be single, married, have kids, etc. Many of you might have forgotten the actual experiences that a child has with LEGO bricks and why a child will keep on buying more sets, since you haven’t been a child in 10+ years! This article’s purpose was to help you get a better understanding of the perspective of a 13 year old and his love for LEGO bricks and his introduction to making money from this love of the little plastic bricks. I hope you enjoyed it.

“Ed”itor's Notes: I can tell you that I have not forgotten my passion for buying LEGO sets. I was also a very demanding 11 year old. I remember asking for the 375 “Yellow” Castle for Christmas(for the plentiful yellow bricks)....and NOT GETTING IT!!! Oh boy! My mother got me a Technic 951 Bulldozer instead, saying it also had plenty of yellow bricks and that you “can't always get what you want.” Ironically, I also asked for and received the Rolling Stones “Hot Rocks” album that same Chrsitmas, with the song, “You can't always get what you want“ on it so fittingly. LOL.

I hope that you have enjoyed our first edition of the BRICK BRATS Blog. I will post more articles as they come in. Please contact me with your ideas and articles. Thanks. Ed Mack

We here at BrickPicker have often been accused of being too pro-LEGO investor.  There are some Bearish LEGO collectors out there and they have let me know on several occasions that we never post about the negatives of LEGO investing.  While many of you know that we are not shills for LEGO, there is still a silent minority of LEGO collectors and investors that think we promote the little ABS plastic bricks too much.  Well, today, that changes.  I am here to talk about the WORST PERFORMING LEGO SETS over the past six months...let's call them the Bottom 50.

  Basically, the “Bottom 50” is the BrickIndex, but in reverse.  The BrickIndex shows the top performing LEGO sets based on CAGR values over the past six months.  The chart below shows the worst performing LEGO sets based on CAGR values of all sets in our database.  Let's take a look at the CAGR Cellar Dwellers...

  THE BOTTOM 50...AKA...THE WORST PERFORMING LEGO SETS

  As the reader can see, there is quite a variety of sets and themes that make up the Bottom 50.  From Atlantis sets to World Racers, there is a mix of small and large, low and high priced sets.  The one definitive theme that looks extremely weak is the Racers theme.  Even worse is the World Racers theme.  This theme can be considered the ultimate investment loser in my book.  Fifteen out of the Bottom 50 LEGO sets, or 30%, are made up with these four wheeled wastes of your LEGO investment dollar.  While they might be somewhat popular among kids, they certainly have no value in the secondary LEGO market.  Avoid them like the plague!  As for the other remaining 35 LEGO sets in the Bottom 50, the Atlantis, Pharaoh's Quest, Toy Story, Prince of Persia, Bionicle and STAR WARS themes make up the majority of what's left.  The Bionicle and STAR WARS themes, while present in the Bottom 50, shouldn't be considered bad investments by any means.  With their sheer number of sets, there was destined to be a couple of poor performers in the bunch.  That leaves the unpopular Atlantis, Toy Story and Prince of Persia themes to stink up the joint.
 

  So why are these sets so unpopular in the secondary LEGO market?  Well, the Racers for one have been around for 10+ years, so obviously they have quite a following and were popular at retail, so why are they poor investments?  Well, not all Racer sets are poor investments to start.  The 8653 Enzo Ferrari and 8461 Williams F1 Team Racer have appreciated into the $400 range, which is not chump change.  There are many other positive examples in the Racers theme.  I guess it boils down to lack of minifigures and many small, repetitive and uninteresting sets.  That's my guess.  I can't say that about the Atlantis and Pharaoh's Quest themes.  They have some of the coolest minifigures and sets on the planet in my opinion.  Sharkmen, flying mummies, giant squids, scorpions and crabs, submarines, ancient ruins...all creative and fun stuff.  Same goes for the Toy Story sets.  I love the minifgures and the sets are all very well done and do a great job of portraying the actual iconic movies.  Prince of Persia, on the other hand, have decent LEGO sets, but the actual movie was so bad that it affected set popularity.  Even a successful Prince of Persia video game line couldn't counteract the negative effects of the awful movie.  The one thing I don't understand with the Prince of Persia sets is how “can't” the LEGO theme be successful?  I mean each LEGO box has a picture of Jake Gyllenhaal on it.  That has to account for some increase in value...right?  LOL.
 

  Besides the repetitive and uncreative nature of the Racers and World Racers theme, the other themes and sets don't really have any main characteristics that will designate them as “losers.”  They are a mix of all types of sets and themes, some with minifigures, some without minifigures.  Some sets are from licensed themes, others are not.  Some sets are based on classic movies, others are based on forgettable ones, while others are based on no movies at all.  Some are large sets, others small.  Of the Bottom 50 LEGO sets, there are seven sets that made me want to further examine the sets to see why they are in that position.  Here they are...The Sucky Seven...
 

Year Released	Pieces/ Minifigures	MSRP (US$)	Current Value(US$)	% Return Last Year	% Return From MSRP	CAGR(%)	Over/Under Mean CAGR
7591 CONSTRUCT-A-ZURG
2010	118/1	24.99	10.24	-17.02	-59.92	-26.21	-37.2
LEGO.COM DESCRIPTION: The Evil Emperor Zurg is out to conquer the galaxy!
BRICKPICKER ANALYSIS: The Toy Story theme is one of the worst of all LEGO themes and it's really hard to figure why.  The Toy Story(s) movie was a classic and the LEGO sets did the movie justice, with accurate looking sets that matched movie scenes and characters very closely.  The minifigures are awesome in my opinion.  Take this set, the Construct-A-ZURG for instance.  It looks exactly like the movie character...right down to the ball shooter.  The purple color is refreshing and mixes well with the red.  A real pleasure to look at and to build(Yes, I have one.)  The playability is also fantastic.  This set DOES NOT deserve to be the worst of the worst.  The one negative was the MSRP, which was high, but now you can probably buy one cheap.  Makes an excellent display set as well.

Year Released	Pieces/ Minifigures	MSRP (US$)	Current Value(US$)	% Return Last Year	% Return From MSRP	CAGR(%)	Over/Under Mean CAGR
8078 PORTAL OF ATLANTIS
2010	1007/7	99.99	63.78	-5.69	-36.21	-13.92	-24.91
LEGO.COM DESCRIPTION: The portal to the lost city of Atlantis has been discovered! Getting through it will be the diver’s greatest challenge yet! The divers must get past hidden traps, shark guardian statues that come alive, Squid and Shark Warriors, and the Portal Emperor before unlocking the portal with the five Atlantis treasure keys. Includes 7 minifigures: 3 divers, 1 Portal Emperor, 1 Squid Warrior, 1 Shark Warrior, 1 skeletonFeatures all 5 Atlantis treasure keys -- green, blue, yellow, red and orange Divers must beware of the hidden traps! Turn a treasure key into the keystone to open the portal to Atlantis! Shark castle measures 18" (46cm) wide and over 12” (32cm) tall
BRICKPICKER ANALYSIS: Atlantis sets, like their desert relatives, the Pharaoh's Quest sets, just don't get any love and this amazes me.  The sets are colorful and creative, the minifigures are some of the coolest I've encountered, the sets are a good mix of buildings, vehicles and creatures.  Earlier versions of the Atlantis theme, like Aquaraiders and Aquazone, haven't fared any better over time.  I guess LEGO fans just don't like water or underwater themes(or desert themes for that matter).  Too bad really.  The Atlantis sets have a lot to offer.  This set in particular, offers over 1000 pieces, a radical shark building/temple and some nasty little minifigures.  The trick with these sets was never to pay retail prices for them.  Discounts are/were always available on these sets and if you start(ed) at a lower buy in price, you can make some money off of these sets.  Atlantis just doesn't deserve being one of the worst themes in my opinion, but I guess I am in the minority.

Year Released	Pieces/ Minifigures	MSRP (US$)	Current Value(US$)	% Return Last Year	% Return From MSRP	CAGR(%)	Over/Under Mean CAGR
7754 HOME ONE MON CALIMARI CRUISE
2009	789/6	109.99	71.23	-1.37	-35.24	-10.29	-21.28
LEGO.COM DESCRIPTION: Aboard the Mon Calamari Star Cruiser Home One , the Rebel Alliance plans its final assault against the Empire's second Death Star. Voted for by fans to celebrate the 10th anniversary of LEGO Star Wars , the famous Rebel flagship features a command center and briefing room with Death Star 'œhologram,' a launch and repair hangar, a Green Squadron A-wing starfighter with removable engine and firing flick-missiles, and the first-ever LEGO minifigures of Admiral Ackbar, Rebel leader Mon Mothma, General Lando Calrissian, General Madine, a Mon Calamari officer and a Green Squadron A-wing pilot. Move the levers and gears to prepare the A-wing for takeoff or to rotate Admiral Ackbar's command chair! Includes 6 minifigures: Admiral Ackbar, MonMothma, General Lando Calrissian, General Madine, a Mon Calamari officer and a Green Squadron A-wing pilot! Set features Mon Calamari command center, repair hangar and an A-wing starfighter! Command center and repair hanger measure a combined 17" (43cm) long and 9" (23cm) wide
BRICKPICKER ANALYSIS: The set with the longest name and not much else...LOL.  Only kidding.  I never liked the name of this set.  Hard to remember.  Maybe that's why people don't care for it.  A Toys R Us “exclusive.”  So much for exclusives.  This set is just an outright disappointment.  Maybe on the pricey side for the piece count, but nothing too high.  Six minifigures.  STAR WARS set.  Interesting display set with a lot of playability.  Not the greatest set, but it shouldn't be in the Bottom 50 in my opinion.  I've seen much, much worse.  I guess Admiral Ackbar and Mon Mothma are not winning any popularity contests.

Year Released	Pieces/ Minifigures	MSRP (US$)	Current Value(US$)	% Return Last Year	% Return From MSRP	CAGR(%)	Over/Under Mean CAGR
7573 BATTLE OF ALUMUT
2010	821/7	79.99	58.28	-3.4	-27.14	-10.02	-21.01
LEGO.COM DESCRIPTION: Battle in, on and around the mighty Alamut Castle!
BRICKPICKER ANALYSIS: The iconic Prince of Persia theme...LOL.  Well, maybe not iconic.  Anyway...this is the largest(...and largest usually means a good investment with LEGO sets) of the Prince of Persia theme and has a decent amount of pieces and minifigures.  While this is no Harry Potter set, or even Pirates of the Caribbean set for that matter, it's really not worthy of being so unloved in my opinion.  This set was readily available well below MSRP for the longest time.  You can still find some good deals on this set, even if you just want to part it out.  Maybe now is the time to buy one of these sets.  It went up 1.67% last month.  Maybe it is a late bloomer.   Don't forget, the LEGO box art is hot with Jake Gyllenhaal on it!!!  ;-)

Year Released	Pieces/ Minifigures	MSRP (US$)	Current Value(US$)	% Return Last Year	% Return From MSRP	CAGR(%)	Over/Under Mean CAGR
5974 GALACTIC ENFORCER
2009	825/7	99.99	71.72	14.92	-28.27	-7.97	-18.96
LEGO.COM DESCRIPTION: Intergalactic emergency broadcast! The sinister Slizer has stolen the statue of the first LEGO Space astronaut'¦and he's planning to break Kranxx out of galactic jail, too! Blast off in the mighty Galactic Enforcer and use its incredible five-way split function to protect the blast-away quad prison pods and capture the space-crooks. Includes 'statue' of 1st LEGO Space astronaut plus 5 minifigures: Slizer, Kranxx and 3 Space Police Officers Also includes Space Police mini quad, alien strikecraft and minifigure accessories Galactic Enforcer splits to reveal smaller space vehicles Lift hinged door and play inside the forensic lab and questioning area Alien strikecraft, including fire trail, measures 8" (20cm) long and features shooting function Galactic Enforcer measures an impressive 19" (48cm) long with a 12" (31cm) wingspan
BRICKPICKER ANALYSIS: Another one of my favorite sets in the Bottom 50.  Oh well.  This one has hope though.  It increased 5.97% last month, so maybe it is making a move up.  This set reminds me of the old Space theme, my first and all-time favorite LEGO theme.  The Space Police sets all have some rather interesting minifigures and this set has seven of them.  The set itself is quite large, with over 800 pieces, and impressive, with a ton of features and playability.  I'm rather surprised that a large set such as this has done so poorly over the last several years, but it looks like this set has seen its lows and might even be a worthy investment from this point on into the future.

Year Released	Pieces/ Minifigures	MSRP (US$)	Current Value(US$)	% Return Last Year	% Return From MSRP	CAGR(%)	Over/Under Mean CAGR
8943 AXALARA T9
2008	693	79.99	55.39	8.65	-30.75	-7.09	-18.08
LEGO.COM DESCRIPTION: Lewa Nuva is ready for battle in this massively powerful battlecruiser! With dual Midak Skyblasters and tri-arms featuring lasers and force field generators, its mission is to smash the Brotherhood of Makuta while there's still time to save the universe! Includes special-edition Lewa Nuva figure! Raise and lower the landing gear! Sides open to reveal the dual Midak Skyblasters that really fire! Turn the gear on the side to open and close the tri-arms! Hold the handle underneath to fly the Axalara T9! Lewa Nuva stands 7½" (19cm) tall! Measures over 20" (50cm) long and 13" (33cm) high!
BRICKPICKER ANALYSIS: One of the largest of the popular and classic Bionicle themed sets, this is another large set that has underperformed.  Usually, the largest sets of a LEGO theme are the best in terms of investments, but once again, the largest set shows the smallest gains...or no gains in this case.  This set has shown some solid growth recently and I hope to see it continue, because I have one.  The set itself is damn cool.  It shoots rockets  that pop out of opening doors, has wings that contract and expand and other neat features.     A fantastic display set, it offers a lot of playability .  A set that doesn't deserve the Bottom 50 designation, it looks to be making some solid gains recently to maybe move it out of the CAGR cellar very soon.  Maybe you can pick up a cheap one and make some money here.

Year Released	Pieces/ Minifigures	MSRP (US$)	Current Value(US$)	% Return Last Year	% Return From MSRP	CAGR(%)	Over/Under Mean CAGR
7848 TOYS R US CITY TRUCK
2010	356/3	49.99	41.11	24.09	-17.76	-6.31	-17.3
LEGO.COM DESCRIPTION: Toys R Us Exclusive set!
BRICKPICKER ANALYSIS: Exclusives aren't always money makers in the LEGO world, especially Toys R Us exclusives.  This is a prime example.  The CITY theme is a solid producer and I still have hope for this set, but for whatever reason, this set hasn't really interested LEGO investors to this point.  Maybe the original MSRP was too high for the set.  I bought these sets at buy 2, get one FREE and to me, it's a solid investment.  But at $50, the starting point was too high.  I like the set though, just not at $50.

    As the reader can see, there aren't really any definite characteristics of a LEGO set that is unpopular and/or one that under-performs in the secondary LEGO market.  Besides the Racers and World Racers themes, there is quite a variety of poorly performing sets.  The Atlantis, Pharaoh's Quest, Prince of Persia and Toy Story themes find themselves in the Bottom 50 quite a lot, but I cannot honestly see any correlation between these themes or the sets that are in the Bottom 50.  Basically, it's a total crap shoot whether or not a theme will be unpopular, thus poor investments.

  What is funny is that the Brickpicker site is sometimes accused of telling people to “Buy, Buy, Buy,” yet I decided to write an article on the lowest of the low, to show potential investors not all LEGO sets will rise in value.  But there is still a silver lining with many of these poor performers.  Many of these unpopular sets were heavily discounted prior to retirement, so if purchased at the right price, many will have appreciated enough to be a decent investment.  There are several sets within the Bottom 50 that have made some nice gains over the past month.  Maybe the trend will continue and these sets will be a positive to your Brickfolio.
 

  I'll let you in on a little secret.  The title of this article is “Anatomy of a LEGO Investment Loser.”  Well, many people probably think it's the sets I'm referring to.  LOL.  Sorry to say, it's me I'm writing about.  I own half of these Bottom 50 sets.  HALF.  25 of 50.  While I have done quite well with many other sets and their appreciation over the past five or six years, I still invested in a ton of losers.  Point is, there are no surefire winners and some sets that you think logically should appreciate well, do not.  Emotion and luck play an important role as well.  In conclusion, let me tell you that diversification has helped me water down my losses and has kept me in the green overall.  Mix up your LEGO investments in themes, prices, sizes and styles and you will avoid losing too much money if you pick the wrong set on occasion.  Good luck in your choices and stay away from four-wheeled wastes of ABS plastic....

Anybody who buys LEGO sets and bricks daydreams about a future in which one does not need to go to the store to obtain them. There will be no need to waste a half an hour or more in time and several dollars in gas from the drive going to their destination, not to mention wear and tear on the vehicle. Not only that, but the time wasted being in the store and having to wait in long lines will be saved. In addition, there is a possibility that after all the wasted time, gas and effort, the retailer you are seeking this product from will not have what you seek. What's a consumer to do? Well, the first idea that comes to mind is Amazon.com. This online giant retailer will enable you to order tens of thousands of products from the comfort of your home and have it delivered to your doorstep in one day. But what's a person to do if the product is not available once again or is too expensive to ship or too fragile? I have a better solution...let's take a look.

Yes, now with the advent of the internet that Al Gore created for us… people can forego those antiquated procedures of trekking to a store and actually conversing with people. The ultimate solution comes straight out of Gene Roddenberry's imagination, into your screen via Star Trek, and what looks to be soon, straight into your home! I am speaking of the Star Trek Replicator...

The Star Trek Replicator has already become a reality through 3-D Printers. According to the website Wikipedia, a 3-D Printer/Printing is :

...a process of making a three-dimensional solid object of virtually any shape from a digital model. 3D printing is achieved using an additive process, where successive layers of material are laid down in different shapes. 3-D printing is considered distinct from traditional machining techniques which mostly rely on the removal of material by methods such as cutting or drilling (subtractive processes).

3-D printing is usually performed by a materials printer using digital technology. Since the start of the twenty-first century there has been a large growth in the sales of these machines, and their price has dropped substantially.[2]

The technology is used in jewelry, footwear, industrial design, architecture, engineering and construction (AEC), automotive, aerospace, dental and medical industries, education, geographic information systems, civil engineering, and many other fields.

The most well known 3-D Printer that has attracted mainstream media attention over the years is the MakerBot, founded roughly four years ago in 2009 by Adam Mayer, Zach Smith and Bre Pettis.

While mostly used by hobbyists, a few are trying to make money through producing small goods, like bottle cap openers and other small knickknacks. It is looked at as the beginning of what is to come. The MakerBot produces products in acrylonitrile butadiene styrene (ABS), high-density polyethylene (HDPE), polylactic acid (PLA), and polyvinyl alcohol (PVA). ABS plastic is of paramount importance for our discussion because that is what LEGO bricks are made of.

The newest incarnation from MakerBot goes by the name of The Replicator 2X, the same name used in Star Trek and goes for around $2,800.00. The Replicator 2X can produce objects in two colors and has taken over the 3-D Printing market since competitor 3-D printers, like the Thing-o-Matic, have been been discontinued. An even newer version, the CubeX, can print in three colors and goes for around $4,000.00. Even for those that lack the skill to be able to create their own products, MakerBot has a vast community made up of fellow hobbyists who create and share their designs for others to produce.

Other 3-D Printers exist and have even been shown on such popular shows such as This Old House. The $70,000 ZPrinter 650, by the Z Corporation, is one such example. To see what the future holds, watch this YouTube video segment from the show...

Like most revolutionary gadgets, their prices may be high to start and their processes slow, but in the next 10 to 20 years these gadgets should be able to produce detailed goods right in your home, at an affordable price. So what does this mean to LEGO investors and collectors? To the LEGO investor, it could mean that your retired sets will be valued at the level of vinyl records in today's age of digital music. There will still be a value in rare and vintage LEGO sets, but a decrease in your investment is a possibility. Why? Because LEGO fans will be able to easily reproduce an iconic set like the 10179 Millennium Falcon in their own parts, so why buy an old and expensive version...the box? Why buy a new LEGO set if you can reproduce them in your basement? This can lead to a possible demise of The LEGO Group itself.

Unfortunately for LEGO investors, your plastic brick empire will be the first to fall from the earliest mainstream 3-D Printing boom, compared to normal action figures which will fall in later upgrades, due to their simplistic shape and design. The days of making money off of “parting” brick pieces will be history due to the ease of printing whatever you need on a whim, and great for parents who deem LEGO an expensive toy for little Johnny or Jane! Free sourced data files by like minded tech savvies who deem the product too expensive will do to LEGO what many did to the music industry by sharing songs through file-sharing sites such as Napster founded by Sean Parker, Shawn Fanning, and John Fanning.

Who will need LEGO to produce bricks when you will be able to produce them cheaply yourself? Bigger sets. More creative sets. Cheaper sets. New colors. How about special bricks that MOCers have wanted LEGO to make for years, but have not had their wish granted? They can make their own “custom” LEGO bricks now. Not only that, the aftermarket MOC instruction business will explode with large and creative models that were only obtainable to a lucky few LEGO Master Builders years earlier. Some of the large CUUSOO models that were not approved because they were too big and pricey will be built by LEGO fans at reasonable prices.

Companies(...and not just toy companies like LEGO) will try to fight off 3-D Printers by slashing down their prices on their products to no avail. Companies will threaten lawsuits about patent infringement, but how can you stop people producing bricks in basements? Want to build a set from 2013? Want to build an exclusive or a new set from 2023 to 2033? No problem, just go on to one of the many Lego fan sites which will have instruction manuals for the vast majority of sets. The new cost of a LEGO brick will be the cost of the raw materials and some electricity to run the machine. No shipping, no gas, and the ability to have instant gratification! Century old companies will cling to lawsuits for survival and have sites taken down that have their patents. But the internet is too vast to stop the inevitability of these businesses going the way of the dinosaur. Beam me up, Scotty!

References:
1. "3D Printer Technology — Animation of layering". Create It Real. Retrieved 2012-01-31.
2. Sherman, Lilli Manolis. "3D Printers Lead Growth of Rapid Prototyping (Plastics Technology, August 2004)". Retrieved 2012-01-31.

In today's world, there are many swindlers and shysters trying to separate you from your money. This theft and deception even finds its way into the world of LEGO bricks. As a LEGO collector and investor, there are many places to buy LEGO sets. One of the best is eBay. But there is an ever increasing illegal practice that is occurring on the eBay site and similar auction sites and the LEGO fan needs to be aware of it. It's called “drop shipping.”

Just to be clear...drop shipping, by itself, is not a scam. It is a common method employed by sellers to reduce inventory costs. Basically a seller either has an agreement with a wholesaler or knows of a price cheap enough that he will sell it to you and make a profit. There are many websites on the Internet that sell things they don't have in inventory, even large, brand-name sites do this.

I have sold things to people via eBay and drop shipped them to their home because I could get it cheaper than they could so I could make a profit. There was a time when the cheapest prices were almost always on eBay but that is certainly not true anymore (I've been on eBay since 1997). Regardless many people only look at eBay to buy something and don’t have the time or inclination to price shop.

Drop shipping is employed by scammers on eBay because they can use stolen credit card information to purchase an item that is shipped to YOU, so YOU are the first person contacted because of stolen credit card use as YOU received the stolen merchandise and thus benefited from the stolen credit card! If these scammers used a stolen credit card to ship to themselves, they would quickly be caught!

I have been taken in by scams on eBay, luckily the last time I detected it but not before I had already won the auction. Here is what you should look for to determine if the eBay listing is a scam:

• Look for low feedback scores, under 100.
• Look for feedback scores on very cheap items (99 cents) on almost all transactions in the last month or two. Probably most are purchases not sales.
• Look for the eBay account to be suddenly selling a lot of high-priced items they haven't sold before. Look to see if the account is selling duplicates of these items.
• Look for stock Internet photos likely from Lego. It is better if the photos look original, but don’t rely on this as it is easy to copy pictures from other eBay auctions. The last scam I fell for had original pictures!

NOTE: If I see #2 or two of any of the others I never bid on their listings. This is very likely to be a credit card scam and the items will be drop shipped to you.

• All high-priced auctions end at the same time. Also check shipping terms to see if there is any delay in shipping. Some will tell you they only ship once a week or will be on vacation when the auctions end.

NOTE: I actually saw one seller whose items all ended at the same minute, over 30 items! This is likely just a straight up scam without any stolen credit cards, the seller is hoping to make off with buyer's money before anyone realizes they won't get their item.

• Look to see if the account has been inactive for a long time - usually more than six months and now has a lot of items for sale. And, even when it was active there was not a lot of activity.

NOTE: This is likely someone's eBay account that has been hacked and is now being used in a scam. Someone who has recently been inactive may not notice anything is going on in their account, or they can't access their account for months.

• Is the LEGO set priced BELOW retail(MSRP)? Many drop shippers will give you a great deal to quicken the sales process and sell more items. I mean, it's not their money, right? They are happy giving you a discount if it makes them $100+ a LEGO set.
• LEGO set has to be available through primary retailers like LEGO, Amazon, Target, etc... so the thief can use the stolen card to send you the set from in stock retailers.
• Is there FREE SHIPPING involved? Many drop shippers will throw in free shipping as a “bonus” to sweeten the pot. Plus many retailers will give free shipping on higher priced items, so it actually costs the thief nothing.

What to do if you won an item and think it's a scam:
In December of 2012, I won a LEGO 4842 set for $130. I noticed the seller had six for sale and had used the same original picture for all six, which all ended within an hour of each other. I got a bad feeling about the transaction, but it was too late. I looked at the seller’s feedback score of about 90, only to see they were almost all for purchasing 99 cent items and all in the last 6 weeks. My habit has been to pay immediately when I win something. But, I had a bad feeling about this auction so I sent an email to eBay. Then, I waited without paying for three days, at which time I started getting notices from eBay to pay for my item.

I called eBay to talk with a Customer Service representative on the phone. You can do this if you first get a number code online that is good for 15 minutes and allows you to talk with an actual person.

I reported what I thought was a scam and she said thank you, but they could not give me any information about their confidential investigations. I asked how long I had to pay for the auction and she said eBay had no set limit. I asked what I could do; she said I had the option of contacting the seller and asking that the transaction be canceled. Only sellers can initiate the transaction cancellation option in eBay.

I waited four more days and was thinking that even if it was a scam I would eventually get my money back from Paypal; but I was concerned that I might be blacklisted by LEGO or Amazon. I went to the auction and looked at the feedback again and another buyer had said Lego had contacted them about credit card fraud.

I sent a message to the seller asking that the transaction be canceled and the seller did cancel the transaction. I went back into eBay a week later and there was no registered user with the seller’s ID and I could no longer bring up the transaction I had won.

I belatedly got an email from eBay telling me that some transactions I was involved with had been canceled and I could take it up with Paypal, if I was out any money.

So, if you win an item, then discover it is likely a scam, don’t pay(although you will receive annoying reminder emails to pay) and you can always ask the seller to cancel the transaction! I would also suggest that you call or email eBay to ask them to investigate the seller. At the very least, it will be noted by the eBay Customer Service representative in your file and this will help protect you if the case ever gets escalated into a criminal matter. It is true you can go ahead and pay and will probably get your money back, but I’m more afraid of being blacklisted from a site like LEGO or Amazon!

I have since seen similar sellers and each time they were selling multiple LEGO sets, but the auctions always had under six items available. I think selling six identical LEGO sets(or any item) is under eBay’s radar. Many years ago, I interviewed with eBay for a programming position and they told me at that time they had more than 45,000 active algorithms that review auctions for fraud prevention. So, while I think eBay is very active in trying to prevent fraud (I wonder how many listings we never see?) those algorithms will never be quite as effective as your own brain! Be safe out there!

eBay and PayPal(...and other large retailers) have improved their fraud fighting qualities and cover most types of consumer issues, but the only way to stop it 100% is for the educated buyer not to buy from these scammers. The best piece of advice I can give you on stopping drop shippers is to ask yourself this simple question before purchasing an item...IS THE DEAL TOO GOOD TO BE TRUE? Basically, why would any legit seller, who is in their right mind and not a large retailer clearing inventory, sell you a non-retired LEGO set below MSRP and with FREE SHIPPING? The answer is...they wouldn't! 99.9% of the time, the seller is not legit. Thank you and good luck in your LEGO acquisitions...
I have also had experiences with illegal drop shippers and have had my LEGO account temporarily frozen because of one. It is everyone's issue. These crooks cause our prices and fees on LEGO sets to go up because of their fraudulent activities. I've become a lot more aware of these kinds of listings, and this article will give you a good start on battling this sort of crime. As Talon pointed out in the above article, there are numerous red flags to pay attention to. He listed many of them, and if a questionable auction checks off several of those red flags, maybe it is best to move on to another auction.*Ed*itor's Note:

Hi. I’m a new investor/collector/AFOL. One issue I have encountered with my new hobby was how to protect the fragile LEGO set boxes from shelf wear and the interior home elements, such as moisture from possible water leaks, dampness from high humidity areas like basements, dust and smoke. Several years ago, I discovered various brands of storage bags and thought these would be an excellent answer to these issues. These bags are large, very durable, and reusable. They would wear out with constant use, but for items that will sit awhile, like LEGO sets, they are worth looking into. They are also transparent, which would enable the LEGO collector and investor to view what is in the bag while the sets are stacked on shelves or similar storage areas.

I’ll first describe the features and advantages of using them to store your LEGO investment. Then I’ll list brands, sizes, prices, and sources.

• Provides protection
• Accurately described as “with their pleated bottom and secure zip seal, they are perfect for storing even your bulkiest items while helping to protect them from moisture, dust and pests.” They also help prevent cigarette smoke from damaging boxes.
• Makes it easy to move or transport your boxes Most brands have a handle
• Reusable After selling the LEGO set that was stored in the bag, the reusable bag can be unzipped and used on the next LEGO investment.
• Transparent Enables the LEGO collector and investor to view what is in the bag, without actually opening the bag up.
• Inexpensive In the worst case, you’re looking at $1.50 per LARGE Lego box, a small price to pay for extra protection. And remember, they’re reusable.
• Group similar sets together Put similar or same sets in the same bag.
• Takes up no extra space in your storage. Unlike some paper products(cardboard), these bags take up little space.

There are 3 brands that I have come across. In each case, consider only the XL and XXL sizes.

1. StorIt

These are the cheapest and can be found at dollar stores. However, their largest bag will not fit the large Lego sets like the Haunted House.

For $1, you can get one XXL size 24” x 20” (60.9 cm x 50.8 cm) or two XL bags size 20.5” x 17” (52.1 cm x 43.2 cm)

They are priced much higher online ($4 at Amazon). Look for them in dollar stores. If you can’t find them, you can order then from Dollar Tree but the minimum purchase is 36 at $36.

Dollar Tree: http://www.dollartree.com/cleaning-storage-hardware/storage/EZ-Stor-Plastic-Storage-Bags-with-Handles-XX-Large/212c261c261p299576/index.pro

2. Zip N’ Go

These are part of the Space Bag series, those bags that let you suck the air out of them with a vacuum to save space. However, no worries. These bags are normal and don’t suck. I have seen them at Linens N Things but cannot find them anywhere online.

For around $13, you can get two XL size 22” x 22” (55 cm x 55 cm) AND two XXL size 28” x 28” (71 cm x 71 cm). The XXL bag will hold the large Lego sets like the Haunted House. In fact, you can store two large sets comfortably in one bag, making the extra cost just over $1.50 per set.

3. Ziploc Big Bags

For $12, you get three XXL size 24” x 32” (60 cm x 82 cm). These would be the most expensive at $4/bag but are the strongest with a double zipper.

Amazon: http://www.amazon.com/Johnson-Ziploc3pk-Bigbag-Closet-Storage/dp/B000V9N1WO (Note: At the time of this writing, I saw them on Diapers.com for $7 with free shipping for orders over $49)

Here are some actual photos of the storage bags being utilized with LEGO sets:

All in all, these large transparent storage bags are a LEGO investor and collector's best friend. The storage bags help protect from the dust and moisture that can be found in every house, yet will also protect from major water damage from possible pipe leaks and smoke damage from fires or cigarettes. Also, the prevention of shelf wear, which can reduce the value of any Mint In Sealed Box LEGO set, is another big positive. While not structural in any way like cardboard boxes are, these bags don't take up any valuable space like paper products do. So do yourself a favor and pick up a couple of boxes and start protecting your LEGO sets. In the long run, you won't be disappointed.

In a time, not so long ago, in a place, not so far away, the STAR WARS theme ruled the LEGO investment world. Iconic LEGO sets like the 10179 Millennium Falcon, 7191 X-Wing Fighter and 10030 Star Destroyer yielded fantastic returns on investment. Almost every STAR WARS set had better annual returns than the standard LEGO set and were universally thought of by LEGO collectors and investors as “can't lose” investments. But over the last several months, the LEGO STAR WARS theme has slowly started to decline in overall CAGR, dropping below the average LEGO Theme CAGR. Take a look at the chart below

As the reader can see, starting in August of 2012, the combined STAR WARS theme average CAGR dropped below the average CAGR for all LEGO sets and themes combined. In other words, your “run of the mill” LEGO set had a CAGR of around 10.47% in August and the once Gold Standard of LEGO investing, the STAR WARS theme, dropped to 9.9% CAGR and has remained below average ever since. What the Hell is going on you may ask? Well for one, the last major STAR WARS movie, STAR WARS III: Revenge of the Sith, was released all the way back in 2005. That is a long time ago in the world of entertainment and keeping people engaged in a movie franchise is rather difficult nowadays, even an iconic franchise like STAR WARS. With an eight-year hiatus in new STAR WARS ideas to base new LEGO sets off of, LEGO has had to base each year's new STAR WARS sets on retreads or previously done or minor vehicles or characters. Basically, LEGO fans and STAR WARS fans in general have lost interest in the stale franchise and remade LEGO sets. The once leader in LEGO investing, the STAR WARS theme, has turned into a below average investment in the world of LEGO investing.

But fear not my young Jedi, help is on the way and he wears yellow shoes and red shorts. His name is Mickey Mouse and he might just inject some life into this tired franchise and LEGO theme. Back in October, Disney bought Lucasfilm for $4.05 billion in cash and plans to release STAR WARS: Episode VII in 2015, with many other STAR WARS movies to follow. Knowing Disney and their proclivity to make sequels, you can be assured that the STAR WARS franchise will be reborn and live well into the future. Also, George Lucas will be an advisor on the next three films, so you know the quality and creativity will be there with the new movies. This is just fantastic news for the LEGO investor, especially those like myself who have a collection that is heavily based in STAR WARS sets. With the renewed and continued interest in the STAR WARS theme, many of the older STAR WARS LEGO sets might once again find strong growth, which has stagnated over the past several years. Depending on when the next movie will be based(in STAR WARS time that is...), it is quite possible many of the older STAR WARS ships, like the Millennium Falcon, will have new roles in the new movie. Can you imagine what a 10179 Millennium Falcon will appreciate to if it is in the next movie? I can only imagine.

So, all in all, the news that Disney will be producing new STAR WARS movies is wonderful to say the least. Not only because STAR WARS fans will get to see new movies, but that the once iconic line of LEGO sets will become iconic and relative once again. With new STAR WARS movies every 2 to 3 years, there will be a plethora of new vehicles and characters to immortalize in ABS plastic bricks every couple of years. No more retreads. Also, with the potential of all the new fans being introduced to the STAR WARS series, older characters and vehicles will find new fans as well. Some of these fans will undoubtedly be LEGO fans as well, which makes for a nice combination for the continued growth potential of STAR WARS LEGO sets that exist today. What's funny is that the STAR WARS Ultimate Collector's Series is what brought me out of my Dark Ages of LEGO collecting and has made me some nice paper profits over the years. But the recent downturn of the theme has had me recommending some of the other hot LEGO themes of today...Ninjago, Monster Fighters, Friends, CUUSOO...to name a few. Well, I am here today to tell you that the STAR WARS LEGO theme is back. Maybe not today. Maybe not next year. But when Episode VII hits the big screen in 2 years, lookout...the prudent STAR WARS LEGO investor will be one happy Geonosian...

I have played with LEGO bricks since I was young(I am now 34), but never collected them in any way until recently. A couple of years ago, my wife got back into LEGO and started buying sets to build with our nieces and nephews. Before long she was asking for LEGO sets from me for her birthday and Christmas. Well, of course a few of the sets were hard to find so I had to turn to eBay. I was shocked by how much some of the sets were going for and that’s what turned me into a true LEGO investor. Even though I have been doing it for only a short time compared to many, I have learned some very good tricks to getting good discounts on LEGO sets and I thought I would share some of them...

Credit Cards

Although I would never suggest anyone sign up for a credit card that they don't need or cannot pay off every month, in certain instances this can save you a lot of money. Before I was even buying LEGO sets I signed up for a Chase Freedom Card. I never had a need for a credit card, but I figured it was safer than using my debit card that was tied directly to my bank account, and if I have to spend the money, I might as well get 1% cash back which the Chase card offers(Many other credit cards, like Discover for instance, also gives 1% cash back). I started using the card to pay my bills and just about anything else I could that I used to use my debit card for. I would pay the card off 2 of 3 times a month(a little over the top I know) to avoid any interest charges. The 1% started adding up quickly since I was putting everything through the card including all of my business expenses, and before I knew it, I had hundreds of dollars in points through the card. The points can then be converted into a check which they will send you in the mail. However, the nice thing about this card is that you can also use those points on Amazon.com and they are as good as cash. Just link your card up through the Chase site and you are all set. After a while of doing this, I was able to spend my points and buy LEGO sets on sale at Amazon. Now, even though this was the same as spending cash, it did save me 1%. Although that doesn’t sound like a lot, I feel that every little bit helps. Also, at times Chase has promotions where you can save up to 5% by shopping at certain stores. This happened to be Amazon.com over Christmas.

After having an Amazon account for years and years, I finally caved and got an Amazon credit card. It wasn’t the $50 I saved on that order that finally made me pull the trigger but rather the 3% I can save on orders through Amazon.com in the future. I just recently signed up for this and haven’t seen the results yet, but I should be earning 3% cash back that I can use on Amazon.com purchases. So basically, if I need to buy something through Amazon, I use this card. If I buy it elsewhere, I use the Chase card.

Editor's Note: The Amazon Card deposits 3% of your previous month's "paid bill" into your account, which can be used directly on Amazon purchases. I have used this card for over a year and along with the Amazon Prime service, which gives you FREE Two-Day shipping on most items, makes Amazon a favorite retailer of mine for purchasing LEGO sets.

That being said, I have perfect credit and pay my card off every month (actually multiple times a month to avoid one large bill) and I would never suggest anyone sign up for a credit card if they cannot do this. If you end up paying any interest at all, then it defeats the whole purpose of the card and costs you more money than it saves.

Amazon Lightning Deals

Every day the first thing I do is check Amazon Lightning deals for the day. Usually, there is nothing good but every now and then they will have a popular LEGO set that can be purchased at a huge discount. Lightning deals only last for a certain amount of time and usually only have a certain number available, but when you do find one, you can save a lot. The best place to see LEGO Lightning deals is on the BrickPicker site on the Amazon Discounts Page. This page shows up-to-date deals on LEGO sets that are 10% OFF MSRP or more on the Amazon site.

Barnes and Noble Membership

I can't remember offhand what a Barnes and Noble membership costs per year(I think $25) but it pays off if you plan to buy a lot of LEGO sets. Basically you save 10% off of any purchase throughout the year by having the membership. They also frequently send out coupons which can be as much as 30% off. While Barnes and Noble doesn’t have the widest selection of LEGO sets, they do have some that are fairly popular, and they frequently have discounts on certain sets.

Damaged Box Discounts

Not sure if everyone knows this or not but a lot of places will give you discounts on damaged boxes. All you have to do is ask. Granted you have to ask the right person and the discounts vary depending on the damage and the set, but at times it can be worth it. A while back my wife and I found set 7208 at Barnes and Noble. It had minor box damage, so we asked if they would give a discount. They offered us 10% off, plus we used our 10% Barnes and Noble membership on top of that for an OK discount. I wouldn’t recommend buying damaged boxes for investing, but if it is for your own personal collection which you plan to build and you don’t mind having a box that isn’t in excellent condition, it can work out on occasion.

Bottle Returns

I added this one in because it makes me feel good about my LEGO purchase when I walk out of the store without having to spend a dime. Basically I consider my bottle returns money already spent. Sure I could return them and buy groceries or anything else, but why not make a good LEGO investment with the returns and maybe make a little more money on it. This one doesn’t really save you any money but at least it keeps you from spending “more” money. Of course it only works in states with a bottle deposit and stores like Walmart or Meijer.

Membership Cards

My wife has had membership cards at her favorite stores forever, but I am just recently signing up for my own, and I don’t know why I didn’t do it long ago. Most stores have some sort of membership you can join which will give you certain perks. Most times these memberships are free and give you huge benefits. Some just ask for your phone number, but most give you a card you carry around. I found using the Key Ring app on my phone works better so I don’t have 50 cards in my wallet everywhere I go. By having these memberships, you either save right there on the spot or later get reward coupons that can be used as cash or for other discounts. For example, Toys R Us rewards program rewards you by shopping there by sending you $5 coupons. I just recently received $30 in coupons that can be used just like cash in the store. Kmart does something very similar. Also, if you have a Meijer in your area I found this to be one of the best places to save by joining their mPerks membership. The membership is absolutely free and all you do is clip digital coupons that you want to use in the store before you shop. You then just type in your phone number and a pin at the register and it applies those coupons automatically. They also occasionally send out 20% off 1 item coupons.

Coupons

This one seems obvious but I can’t tell you how many times I have shopped online or in store only to find a coupon the next day. In most cases it is a trip back to the store to return and then rebuy the item with the coupon, but I have had cases where that didn’t work out because I couldn’t get back to the store before the coupon expires. If you are shopping online, check retailmenot.com before every purchase to see if there is a coupon you can use. In some cases it may just be a free shipping coupon but it still helps. If you are shopping in a brick and mortar store, then make sure you do your homework first. Look at their current flyer online and check if there are any coupons you can print from their site. Also check competitors ads because many stores will price match. Also, when you walk in the door, grab a flyer. Sometimes they contain coupons you can use on your purchase that day.

Target Red Card

Recently I went through the checkout line at Target and as usual they asked me if I would like to save X amount on my order by applying for a Target Red card. My response was “No thanks, I don’t want another credit card”. Well, the cashier responded that they also have a debit card version that will work just like a check. I still wasn’t sure I wanted it until she told me that with the card I save 5% on any purchases in store and online, and you also get free shipping on any online purchases. It sounded like a good deal and a way to finally match some of the Amazon.com prices, so I signed up. Basically, the 5% just about covers the tax (6% here in Michigan) and with free shipping it makes some prices on Legos just as good as Amazon. Plus, I have had much better luck on getting undamaged boxes from Target than I have Amazon, so I am now a happy Red Card holder.

ebates.com

ebates.com pays you money for shopping at online stores such as Amazon, Target, Kmart and more. I just recently started using this site and am very skeptical that I will ever get any money back on my purchases. I have heard both good and bad things about it, but it is definitely worth a try since it is free and takes very little work to first visit their site and then click over to Amazon or another online retailer. Only time will tell on this one.

Buy from out of state

Due to the Interstate Commerce Law, many purchases made from retailers located outside the buyer's state are tax free. Although the fine legal print might say differently, many online retail sites do not collect sales tax from buyers if you are from another state. This policy is void if the retailer has a Brick and Mortar store/warehouse in the state the buyer resides.

eBay.com

Sometimes you can get really great deals on eBay and other times not. What I do is a few different things. A few times a day I search the word "LEGO" by newest listings with a Buy it Now. Although rare, every now and then you can find someone that has just listed something at a really great price. Either they don’t know how valuable the LEGO set is or they want quick cash. In either case, it works out to your benefit. Usually these great deals go fast though. I have been beat out many times doing this. By the time I click the buy-it-now button, I get a message saying the item is already sold so I can say I am not the only one who does this. Another way is to search “LEGO” and view by auction format ending soonest. There are times of the day that very few people are bidding and you can get some great deals on auctions that have 0 bids ending soon. I don’t view Buy it Now listings when doing this because I figure if the item was on eBay for days at a great buy it now price and no one picked it up then it might not be worth it. This is just my opinion though, and you might have luck with buy it now and ending soonest listing. And finally, my favorite thing to do is search for "make an offer" LEGO listings. You would be surprised at what people will really take for an item when they have a real guaranteed offer right in front of them. I have been able to knock up to $20 off of a Buy it Now price just by making a fair offer.

Don’t Pay Over Retail

This may sound silly but always check the retail price on brickpicker.com before purchasing. Some stores (you know who you are TRU) will mark LEGO sets way up past retail and then put them on sale or a BOGO(Buy One Get One) 50% off deal. In some cases you are still paying way more than simply buying the set on Amazon. Just make sure you know the “real” price of the set before you jump on it.

And lastly…. Stalk The Return Line

Now I have never done this myself, but I have heard of others doing it. Basically, you linger on a busy day of returns in the weeks after Christmas and once a LEGO set that you may want gets returned you jump in line and ask if you can purchase that set. While this almost sounds a little creepy to me, I guess it works out for some. I would imagine maybe you would find a set that is now sold out but I don’t know. I guess instead of “stalking” you could always just go in once a day and ask if any Lego sets were returned that you could purchase. Count me out on this technique.

Conclusion

Money is tight. That is how the old saying goes. Every penny saved on a LEGO set purchase can go towards investing in new LEGO sets. These are just some tips I thought I would offer to help everyone save on their LEGO purchases. While many are already well known, others might be less known, but nonetheless effective in saving a couple of bucks. Whether it's a couple of dollars or a couple of hundred dollars, every little bit helps. Good luck and happy LEGO purchasing...

The point of investing in anything is to increase a person's net worth through the increased value of what we purchase. There's three main parts to an investment cycle where decisions need to be made, which affect its value: When you buy, While you hold, and When you sell. Making money the first two ways has been extensively covered, (very well I might add), by brickpicker.com. They identify stores' sites with their specified discounts, eBay listings below each item's analysis, and more. Brickpicker also assists you during the holding stage by offering advice on which sets have potential for increasing their values, as well as updated analysis of how each set is doing and current trends. So this article's intent is to cover the last stage of investing: selling...and not so much the When “to” sell aspect (because that is another large and in-depth article in itself), but Where to sell a LEGO set and Whom to sell it to. For without this aspect, any potential gains will not be realized.

Part I: Where to Sell

So you have a LEGO set...you bought it cheap, it increased in value and now it has plateaued or even decreased. So, you decided to remove it from your Brickfolio and sell it, but where? There are several venues available to you: Bricklink, eBay, Amazon, Craig's List, or private sales. But which one you go with should depend on your comfort level for risk, and how much you are willing to spend to sell. I've personally bought and sold on all but Amazon and all have their advantages and disadvantages. Let's look at each one, advantages and disadvantages, and provide a recommendation.

eBay

eBay is a well-known option that's been around almost as long as the World Wide Web. It has two primary and separate fees (three if you use Paypal): insertion and final value fees. You can read about them in detail here: http://pages.ebay.com/help/sell/questions/what-fees.html. Insertion fees will usually run $0.50 plus whatever add-on features you want. Pics are now free and even a requirement, so the initial costs have come down significantly. Final value fees are just what they sound like, the value of your item at sale. Although the amount depends on what you're selling and for how much, most LEGO sets will go between $50 to $1,000. This example makes the final value fee $5.50 for the first $50 plus 6% of the remaining balance up to $1,000. Paypal also depends on the size of the transaction, but ends up being around 3.6%. Overall, it's about 11% from start to finish.

A $200 sale would be as such:
$5.50($5.50 of first $50) + $9.00(6% of remaining $150) = $14.50 = 7.25% of $200 + 3.6% for Paypal = 10.85% of transaction

eBay Advantages:

• Higher volume of customers = quicker sales, higher prices
• You can auction or do a fixed price sale
• Insurance included for you and buyer
• Shipping service available at discounted price
• Free educational products to take advantage of
• Free mass loading software
• Detailed sales records
• Relatively great customer service
• Easy international sales
• Seller rating system and discounts for highest rated
• If you want maintain a long-term presence, its easier to start/maintain your 'brand.'

eBay Disadvantages:

• Higher sales fees in comparison to some competitors
• They tend to be strict about their policies, so read them first
• Reputation has a long memory (an advantage for a buyer) and can take a year to clean itself up.
• Caps on sales are used to prevent you from taking on more than you can chew, but can be increased as you prove yourself.

Amazon.com

Amazon is another option for those wishing to say goodbye to their LEGO sets. Amazon's a very trusted site and one of the pioneers along with eBay. You can see a detailed fee schedule:
http://www.amazon.com/gp/help/customer/display.html?nodeId=1161240. Again there are two fees: referral and closing fees. For toys, the referral fee is 15%, plus a variable closing of $0.45 plus $0.05/lb. So depending on the size of what you're selling, your fees may be well over 15%, or a flat 15%.

Amazon Advantages:

• Excellent customer service
• Higher volume of customers = quicker sales, higher prices
• Easy listing with their online catalog
• Charge back protection (if you use credit cards)
• Amazon guarantees all marketplace sales.

Amazon Disadvantages:

• Painfully high fees
• Sellers must adhere strictly to the site's policies or lose their presence on it.
• It's hard to establish your individuality or brand.

Craig's List

Craig's List is very inexpensive...very! However, you usually need to do a face-to-face transaction, so eventually, you have to trust. There have been crimes associated with Craig's List transactions, so we recommend meeting in a public area and only accept cash. For the buyer, there is no recourse for faulty items, so thoroughly check the item you are buying before accepting it. Unless you are posting a job search, your fees are zero and the site shows where you are located (not your address), so your buyers can determine if they want to go that far to buy it.

Craig's List Advantages:

• No fees
• Buyers are guided to Seller in their local area.
• Not just for selling, but can be used to look for services, jobs, cars, etc.(equivalent to the classified section at the back of a newspaper).
• High volume of users, but not all buyers.
• Easy to use

Craig's List Disadvantages:

• Major issues related to fraudulent sellers and buyers
• Buyer and seller meet face to face, so caution must be used during transaction. Never meet at your home or a private area.
• No protection to buyer or seller after sale...example: insurance
• No feedback or rating system

Bricklink

Bricklink is the eBay of the LEGO world. Everyone who invests and collects LEGO bricks is very familiar with this site and its clumsiness. The site has almost everything you could want, LEGO-wise, but the process of buying requires the buying, then the invoice, then the paying, then the shipping. All of which is handled by email and Paypal. But Bricklink only charges you 3% of the purchase price, plus the Paypal fees. Most of the LEGO info is already established there, so there's less info to put in.

Bricklink Advantages:

• Very cheap fee schedule.
• A very specified educated user/customer
• International customer base
• Easy to list products

Bricklink Disadvantages:

• Not as large of a customer base
• Buying and selling can be cumbersome and non-intuitive.
• No shipping service
• A lot of like competition
• No insurance other than what Paypal provides.
• Description and photos of items being sold is limited.

If all these fees seem overly complicated, fear not my young Padawan. There are many apps that determine the fees for you and some even compare them so you can decide the most cost effective route. We recommend the Auction Calculator, Professional Edition, by Logicworks. It determines fees based on preset variables; from eBay store ownership and Powerseller status, to Amazon's referral fees. Compare the fees and see which is best for you.

Overall, we'd recommend selling LEGO bricks and sets on either eBay and Bricklink. eBay has a wider audience, that includes the entire population of buyers, not just the diehard LEGO fans that have heard of Bricklink. eBay does allow you to set a price and let it run til it sells, but it also has the option to auction. So if you're in an emergency and need your money fast, eBay's the only way to go. However, if you're patient and want the most money out of your set, Bricklink may be your solution. You can still establish your price where you want it and sooner or later someone will come along and buy it. Both Bricklink and eBay use Paypal, which is a very safe option for both sides of the transaction. Both sites have relatively low fees in comparison to Amazon, so it all boils down to how fast do you want to sell it and how much you're willing to pay in fees for more exposure.

Part II: Whom to Sell To

So, we discussed where to sell your LEGO set, but to who you sell a LEGO set to can also make a difference and additional profits for the seller. In Part I, we recommended Bricklink and eBay for the LEGO seller. Bricklink's low fees and eBay's ease, safety and exposure outweigh Amazon's and Craig's List's advantages. But another major factor is their ability to sell internationally. The World's population is roughly 7 billion people and the US's population is 311 million. That means 95% of your potential customer base is outside the US borders. Still, most eBay sellers in the US elect not to sell internationally. Some sellers refer to customs paperwork and shipping restrictions/costs as the main ingredients leading to this decision. Some also worry about international import duties and charges. With most, its just the fear of the unknown and the potential for losing a package overseas. But with just a bit of education, you'll see that shipping internationally is actually very easy... especially if you're using eBay or Bricklink.

The additional costs of international shipping, such as import duties, are the responsibility of the buyer. The package arrives at their country's customs department and send this charge directly to the buyer, so it's not really something to worry about. The customs paperwork is an additional requirement to what you would need to do for a US buyer, but it couldn't be more simple... again, especially if you use eBay. When creating a shipping document, you first enter the weight and dimensional info as you normally would. Once entered, a US sale would lead you to print out the shipping label. But for international labels, you're instead redirected to input product information for your customs forms PS form 2976. On eBay, this is prefilled for you, using the data from your listing. All you really needs to do is click the acknowledgment field, (located at the bottom by your signature block and usually highlighted by a red arrow), that says you've read and understand what you can and cannot ship. From there, what you do next depends on how you ship, First Class and Parcel, or Priority. First Class and Parcel will print out a single label that you must sign and date and then attach as you normally would. For Priority, the only difference is the number of labels you'll print out. You'll cut along the dotted lines, sign, date, and put them into a Ziploc bag. From here, just tape the bag to the package as your label. Be sure to sign and date all the forms, but the sender's copy, before putting them into the bag; label facing out. The tracker for international packages currently tracks only to the US border, so it's only good for the start of its journey. But this will change once a new, easier system becomes available to the regular public.

Besides a larger customer base, there's an even better reason to sell international...price! Being born in the US is a blessing in many ways, but one of the most overlooked is our price of LEGO bricks and sets. The US LEGO market is significantly cheaper than most of the world. In Australia, the prices are about 33% higher, Europe the same way. Even Asia and Japan are significantly higher. When you combine this with the week dollar, many other countries are dying to buy their LEGO sets here. I've only been selling LEGO internationally for two months, but the day I started my sales went up 40%. Not to mention, it's a great way to teach geography to your kids. We have a world map on the wall and every international sale, in a new country, means another star and a chance to learn a bit about it. So far we've got over 34 separate stars we've sold to; amounting to over 147 sales in just two months...which amounts to almost half our sales.

There's always an opposite side to every coin and this one's no exception. So what are some of the down sides? There's the lack of tracking outside the US borders and some government's postal services aren't as trustworthy as ours, leading to missing packages. Rarely, there's even a communication gap. However, the benefits vastly outweigh the costs, especially with a new program just getting started at eBay, the Global Shipping Program. You can read about it here: http://announcements.ebay.com/2012/11/attention-sellers-upcoming-program-will-make-selling-internationally-as-easy-as-domestic/. Essentially, it's a program where you'll ship to a place stateside and they'll handle everything else, all the way to its final destination anywhere in the world. Now, no one has an excuse not to ship internationally. But of course we need to be fair, so here is a list of advantages vs disadvantages:

Advantages:

• Enormous customer base
• Easy to compete price-wise with other local LEGO stores and sites
• Can sell at higher sales price...even new sets(This is why some new and “available from primary retailer” LEGO sets have current BrickPicker prices higher than MSRP).
• Bring money into the US economy
• Insurance available at discount
• New program will make international shipping as easy as domestic

Disadvantages:

• Increased number of fraudulent buyer
• Potential for corrupted postal services
• Extended shipping times, up to 2-4 weeks and sometimes longer
• Tracker only works to US border, but will change with new program

As you can see, by picking the right selling venue and selling to the right people, you can actually increase your gains from your LEGO investments when it is time to sell. Bricklink, eBay, Amazon and Craig's List all have their advantages and disadvantages and what works for one LEGO seller might not work for another. Also, international shipping, while lucrative for some sellers like myself, might not be worth the added hassle for other sellers. That being said, the new Global Shipping Program, when launched by eBay, will give eBay a decided edge over its competitors and along with its other advantages, will make eBay the most effective site to sell your LEGO sets in my opinion. So, pick smart, buy smart, and sell smart. All three basics of LEGO investing should be taken into consideration over the life of your investments...otherwise, you might be selling yourself short.

JeffEditor's Note: This article written by one of our members, Eschdaddy. We would like to thank Eschdaddy for taking the time to write this excellent and informative article for all of our members to learn a litlte more about the marketplace options when it comes time to sell. Eschdaddy was awarded 500 BrickPoints for having this article published on the site. Thank you! -

There are over 9000 LEGO sets in existence. Of those 9000+ LEGO sets, the vast majority have been retired or in LEGO terms, gone EOL(End Of Line). The common topics among forum members usually relate to newer LEGO sets, while the LEGO sets that are five years old or older, get very little attention in terms of buying as an investment. New sets like the 10211 Grand Emporium, 10197 Fire Brigade, 10217 Diagon Alley and 21102 CUUSOO Minecraft get a lot of love from LEGO investors. There is constant speculation of when these sets will retire and how high they will appreciate. There is constant dialogue about the various sales and deals for new sets, but are we overlooking thousands of older and retired sets in the process? I say the answer to that question is a definite...yes.

  For our purposes here, an “old” set will be any set that is five years old or older. A set like the 10188 Death Star (or “Live Star” as some members call it) is an exception to that rule in that it is still being produced five years after its initial release, but removing the 10188 and others like it from the equation, leaves a solid standard in which to separate new and old sets. It is my belief that the majority of LEGO sets will be retired in a year or two after initial release and make its largest increase in value in the secondary market soon after EOL(approximately years three-four after initial release). Around year five, the set's rise in value in the secondary market seems to slow on an annual basis, eventually leveling off at some period...and maybe even dropping in value at some point. Many LEGO collectors and investors will sell their investment LEGO sets around this time(~five years) frame and start the process again with another new LEGO set. It is a method that has worked for many LEGO investors over the years and has made many a LEGO investor/reseller some solid profits. But can this technique be applied to a set that is older than five years old and come up with a solid return on investment? Let's take a look...

  When I discuss older LEGO sets and their investment potential, I always like to discuss examples of how I bought older sets that have appreciated well five or more years after release.

  Take a look at the chart below. These are some examples of LEGO sets I bought after they were retired. All the sets were at least five years old and retired when I bought them. I bought them at various times on EBAY auctions/Buy It Nows and were all MISB/NIB condition. Take a look:  

As you can see, there are some really nice gains there from sets that were five years old or more at the time of purchase. These are just a few of my more memorable sets I have acquired over the years. There are hundreds of other smaller sets, such as the 10020 Santa Fe Super Chief and 10026 UCS Naboo Starfighter, that I have bought that meet this criteria and appreciated nicely as well, but I do not want to bore you with charts. As a matter of fact, many of my smaller, older sets have appreciated even better than these large scale LEGO sets. I have tens of dozens of older STAR WARS(especially the mini sets) and Bionicle sets that have exploded since I bought them in the secondary market. Many have since leveled off in price, but that doesn't diminish the strong returns on investment that were achieved. Ideally, I should have sold off some of these sets a year or two ago, to maximize profits, but I am a collector first, investor second. What is funny is that my first 100+ or so sets wee all old and retired LEGO sets. The 10179 Millennium Falcon was my first “new” purchase. These older and retired LEGO sets have served me well over the years and have made me a tidy profit(on paper at least).

  When I started collecting LEGO sets, there was no such thing as BrickPicker.com. It was a figment of our imagination. I had to search and search and research to find decent deals. I would scan the EBAY LEGO auctions for HOURS every day, looking for older, cool sets that intrigued me. I would scan the Brickset.com pages to look up old sets and jot down information to compare sets. I would come up with lists that were pages long with chicken scratch charts and such to find sets that were worthy of my investment dollar. Heck...it wasn't even investing to me. It was collecting and a lot of damn fun...and addictive to say the least. Well, Jeff and I are here to make your life a little easier than mine was five years ago. With the development of our new, Top Performing Retired and Older Set Chart, you will be able to see a list of the top 50 appreciating older and retired LEGO sets over the past six months. The chart will show you sets that are at least five years old and have been retired and have appreciated well...many with gains of 15% or more in six months. It will also show you buying options for the particular set of interest within a given range of prices. Remember, these sets have been around quite awhile, so this sort of return on older sets is quite amazing.

So in conclusion, I hope that you utilize this new chart and consider buying an older LEGO set as an investment. The explosion of LEGO investing and the interest in new sets like the Modular Buildings have put a premium on sets like the 10211 Grand Emporium and 10197 Fire Brigade and have caused thousands of LEGO investors to buy multiples of these sets in the hopes of a huge score one day. While this may pan out in the future and these sets might turn a wonderful profit, the likelihood of this happening is growing less and less with each new set that is sold. I often tell people to think “outside the box” when choosing LEGO sets to invest in. Buying new sets, waiting a few years and flipping them, sounds easy...but with anything, positive results are not guaranteed. By diversifying your collection and looking at older and retired LEGO sets to sink your money into, you can stand to make a pretty penny like I have over the years investing in these more traveled sets. LEGO investing is a grind. It takes time, patience and a willingness to risk some money. Don't be afraid to spend $500 on an old set that has appreciated well, but still shows signs of continued growth. You never know, that $500 can turn into $1000 in the blink of an eye. Maybe the next 10182 Cafe Corner or 10190 Market Street is somewhere on the chart. Good luck...

page to see what sets have been the top performing retired/older sets over the past six months.Top Performing Retired and Older SetsBe sure to check out our new

Whether you are a wet-behind-the-ears AFOL(Adult Fan Of Lego) fresh out of the Dark Ages, or a seasoned brick veteran, there are two major classifications to consider when evaluating a good set for investment purposes: licensed franchises such as the STAR WARS and Lord Of The Rings(LOTR) themes or original LEGO series such as the City or Friends themes. There is strong evidence for either category to do well in its own right, so how do you choose?

When looking at current values of the most successful LEGO sets that are now enjoying the sky high prices that accompany EOL(End Of Line) status, there is a good mix of licensed vs. original. The UCS(Ultimate Collector's Series) Millennium Falcon 10179 is the talk of the town these days with a Brickpicker price guide value of $2169, but let's not forget about the Cafe Corner Modular that went from $140 in 2009 to an astonishing $1,122 just a few years later. Although the Falcon boasts a higher price tag, it has not increased in value eight times(!) its original MSRP like the Cafe Corner 10182 has. I think a lot of people miss the fact that if you had purchased three Cafe Corners with the same money that it cost you to get one UCS Falcon, you would have a higher overall return on investment by over a thousand dollars.

Another great comparison is the City themed Town Plan 10184 set vs. the Batcave 7783 set from the original Batman theme. These sets came out around the same time, and had similar enough retail prices for the sake of this discussion. Both sets now book at right around $450, and are highly sought after. City is an original LEGO theme that has enjoyed a lot of success over the years, and as we all know, Batman is a well-documented, ever-popular theme that first appeared in 1939.

The Grand Carousel 10196 is an impressive piece of brick engineering that has an equally impressive price guide value of $816. It is part of the Miscellaneous Advanced Models series. Another set came out around the same time, had an almost identical price and piece count, but a much larger fan base. The set I speak of is the Death Star II, Set No. 10143. As I am sure you have guessed by now, it has a very similar price guide value as the Grand Carousel at $876.

These three examples represent only a minuscule amount of data in the case of licensed vs. original. So how do you know which is the winner? Which one is the safer bet? Is there really a magic formula or concrete answer? The answer to that question is…no. Sorry to disappoint, but no. The reason there is no one clear cut favorite over the other is that all LEGO sets are high-quality, well-made, and a lot of fun. Star Wars may have a humongous following, and the Death Star is the stuff of legend, but somehow a previously unknown 3,263 piece carousel has found a way to give Darth Vader's floating fortress of foulness a run for its money.

The difference between a Cafe Corner 10182 and a Millennium Falcon 10179 represents the difference between one LEGO collector and the next. Everybody has their own preferences and tastes. I personally would be inclined to want to build the Falcon, but let's face it, there are people out there who have never seen Star Wars and have no interest in building the fastest hunk of junk in the galaxy. Maybe they are an architect by trade, and would love nothing more than to spend a few hours assembling a 2,056 piece building that bares a nostalgic resemblance to the old store on the corner of the street they grew up on.

As a LEGO investor and collector, there are many places where you can buy new LEGO sets.  In the United States, large retailers like Amazon.com, Walmart, Target and Toys R Us sell massive amounts of new LEGO sets.  Great Britain has similar large retailers like Argos, Myer and Tesco.  Of course EBAY is a worldwide option for new and used LEGO sets.  That leads us to The LEGO Group and its Shop At Home(S@H) online site and brick and mortar stores.  The LEGO retail sites make up the backbone of their entire business model and is the one place that you can buy all the new LEGO sets.  But a question arises, why would a LEGO investor and collector buy directly from LEGO when they can get the same LEGO set cheaper from another large toy retailer?  One reason...the LEGO VIP Program.  Let's take a look.

I would like to go into a short discussion about the benefits, and how best to use the LEGO VIP program.  First off, as with any purchase, you should do your research and determine what is the best deal for you.  There are times when it would be better to buy something at Walmart or another large retailer for 40% off, than buying from LEGO just to get the VIP points.  But there are advantages to the VIP program that you cannot get anywhere else.  Opportunities may arise when you can maximize your points and choose to buy from LEGO directly, instead of other retailers.
 

  In summary, the LEGO VIP program allows you to earn points for each dollar you spend either at a LEGO store or using LEGO Shop at Home.  You earn 1 VIP point for every dollar you spend.  For your information, this article is focused on US purchases, because of my experiences with LEGO and the program.  For every 100 VIP points you accumulate, you will earn a $5 VIP Reward towards a purchase of LEGO items.  What that means is that, if you buy a Haunted House from LEGO Shop at Home (LSAH) for $179, you earn 179 VIP Points.  This earns you one $5 VIP Reward and 79 points towards your next reward.  Now, you may use that $5 VIP Reward on your next purchase, or you can save it up and accumulate more rewards dollars.  In its basic form you are talking about a 5% discount to your LEGO purchases.  Not bad, but probably not enough to really get you to purchase from LEGO directly unless you had to.  This brings us to some of the other nuances of LEGO VIP program.  The VIP program also gives you access to exclusive sets and deals.  When you combine those sales and deals that is where you really start to maximize your LEGO VIP benefits.  Signing up for the VIP program also gives you access to the VIP emails.  I like these emails because they highlight upcoming deals or new sets that are coming out.
 

  Just as there are certain items that you can only purchase from LEGO, LEGO “exclusive” items, there are also VIP “exclusive” items.  If you are going to want to buy your Haunted House, then you have to buy it from LEGO as an exclusive, why not collect your VIP points for those purchases.  In addition, LEGO VIP members have access to purchase items that non-VIP members do not; for example, the 10230 Mini Modulars set.  Clearly purchasing this set is a personal decision, but you must be a VIP member to get it.  Also, VIP members have access to certain items early.  This year the 10229 Winter Village Cottage was available two weeks early to VIP members.  This could allow you to pick up a few sets early and sell them to the eager buyers.  Potentially picking up some profits. I personally cannot bear to part from my sets, so that is not a benefit to me.
 

  Now we have talked about the basic program and exclusive purchases where you would want or have to use the program.  Let’s talk about how to maximize your VIP point accumulation.  If you want to really get the most VIP points from your purchase, then you want to buy items when they earn the 50 VIP “bonus” points or better yet “double” points!  Double points and bonus points can be earned a couple of ways.  Every month LEGO has deals for VIP members where sets are listed as bonus points where you earn an additional 50 VIP points for the purchase.  You can find these deals by looking at your LEGO VIP account and looking for Promotions.  As a bonus VIP point example, if set 6868 Hulk’s Helicarrier Breakout is earning 50 bonus points, then, when you purchase the set for $49, you earn 99 VIP points instead of 49.  This is a bigger advantage on some sets than others clearly, but it can add up.  When you start getting double points, things really start to add up.  That Haunted House we were talking about earlier, if you are getting double points for your purchase, it is worth 358 VIP points.  That means $15 in VIP rewards.  OK, I understand that we are still just looking at 10% off, but the article is about how to maximize your VIP points, not to convince you to pass up the 40% off sale at Walmart.  Double points are even better for earning VIP rewards.  To earn double points LEGO has different monthly deals that you can take advantage of, they also give double points for all collection purchases, and certain times of the year they offer double points on all purchases.  I try to strategically make my purchases from LEGO to take advantage of these offers.  I used the double points on all sets this summer when I picked up my Monster Fighter and The Lord of the Rings (LOTR) collections.  An example of a collection is the LOTR collection that contains all seven of the sets out at the time.  The way LEGO grouped the collection gave you the Shelob Attacks set free, and it earns you 705 VIP points.  Now you are talking a $20 set free and $35 in VIP rewards.

You might think at this point that we have discussed all the ways to maximize your purchases, but there is actually one more consideration.  LEGO also likes to splash in free shipping here and there for purchases over $75.  I think they are very strategic about this.  For instance, when they release a number of new sets, they sometimes have a double points promotion, but not free shipping.  All the eager buyers bought their stuff early. If you are patient you may see a free shipping offer start in the middle of the month.  Double points and free shipping is the way to go if you can get it from LEGO.  In the chart below I have tried to provide an example of the graduated benefits of a purchase of the Haunted House.  Clearly highlighting the sweet spot of double points and free shipping.  

  I hope this helps with your understanding of the LEGO VIP program and how to maximize your rewards.  One final way to maximize the VIP points is to look at the LEGO Sales and Deals and combine them with some VIP points and free shipping options.  Some great specials can be found at times, so it pays to check daily.  I personally like to save up my VIP rewards and get those sets that are more expensive.  That is who I got my first Super Star Destroyer with just VIP Rewards and more recently my Death Star for $100 and VIP rewards.  It is almost like getting free sets to me.  How much do I have to sell the Super Star Destroyer for to make a profit?  Not much.  

!500 BrickPointsThis article was written by David (a.k.a dschooley). This was a great idea for him to bring this article to our attention and explain it. We do know people that don't ever buy from LEGO or use the VIP program. If you use the program and shop smartly you can definitely gain a nice advantage when you use your points. We thank David for taking the time to write this excellent article and have also awarded him

You called in sick to work, hang out in the room closest to the front door, you turn down the volume on the TV. What are you waiting for? You are waiting for that package to arrive one of the three big carriers, USPS(United States Postal Service), UPS(United Parcel Service) or FEDEX(Federal Express). What is in that package? The LEGO set that you ordered a few days ago. You have tracked it online at least 50 times since you placed the order so you know where it came from, where it has been and more or less when it will arrive. KNOCK KNOCK KNOCK!!! The moment you have been waiting for, it is finally here! You scribble your name on the little hand held scanner handed to you by the carrier and slam the door in his/her face because you are in a hurry to rip open the box to unveil your newest treasure. Your happiness quickly becomes sadness. In your best Darth Vader Episode III voice you yell Noooooooooooooooooo! Your LEGO Box that was inside looks like it has been kicked around more times than a soccer ball during the World Cup. If you have been in the LEGO game for more than a few minutes, this has happened to you, if it hasn’t I am here to bet my entire collection that it will eventually. This is especially traumatic when you demand your LEGO box in pristine condition. These people(me) are usually new to LEGO investing and I am told that the need for a pristine box will eventually subside. Here are some tips to increase your chances of receiving your set in acceptable condition.

First, let’s start with the carriers themselves. I understand that you are at the mercy of the retailer as you cannot choose the carrier, it is chosen by the retailer. The two most commonly used are UPS and USPS. Unfortunately, the best carrier in my opinion is FED EX, and it is the carrier least often used by the major online retailers. There seems to be some debate whether the LEGO box is damaged prior to being shipped or damaged while in transit. Sometimes there are clues as to where it happened, but nothing concrete. In my opinion, most of the time the damage happens during transit, I have no evidence, just my gut feeling.

The major online retailers overall do an OK job at packing the sets. I have had sets ranging from arriving in the brown outer box from the LEGO factory, to a set arriving in a box 6 times bigger than the actual set with absolutely no packing materials inside. Here is a list of the 4 major LEGO retailers and tips. Keep in mind that these are suggestions.

Amazon: Sign up for Amazon Prime, the main advantage is that you get free two-day shipping on all items you order, the less time it takes from warehouse to your house, is less time it is bouncing around in the back of a carrier's truck. Prime does cost an annual fee, around 100 bucks, but if you order a lot from Amazon, it will pay for itself in no time. In fact, many times, you will receive the item in one day if ordered early in the morning. Only buy from Amazon direct. If your item is damaged when it arrives, they will work with you very diligently, they pay for return shipping and will usually send you out a new item before you even send the damaged one back. Dealing with private sellers can be a hassle sometimes and there is always the chance of getting scammed in some way or another. Amazon does guarantee every purchase, even those from third-party sellers, but sometimes it takes a bit longer to work out an exchange/refund.

Toys R Us: Despite their markup, Toys R Us has always been a popular choice for LEGO sets, mainly because of their great selection and also because of the promotions they run on a regular basis, Buy 2 Get 1 Free, Buy One Get One 40%/50% off, free shipping, etc... All sets seem to be packed differently so it is hard to tell how they will arrive, but I've had good success on most occasions with Toys R Us. The best bet(not a popular one) would be to choose expedited or next day delivery usually which comes by FEDEX. It will take money from the overall profit of your set, but if you choose the right ones, it shouldn’t hurt you too bad. Of course, there is always the option of actually picking the LEGO set up at local Toys R Us location, but not all LEGO sets are available in the local stores, so that might not be an viable alternative.

S@H(LEGO SHOP AT HOME): This is the store on the LEGO website that is usually the best bet when it comes to condition of the box. They do a good job overall and seem to take more pride in handling and shipping that other retailers. They usually don't over pack LEGO sets and many times ship boxes individually in large, pre-fit shipping boxes. Larger sets like the 10179 Millennium Falcon and 10030 Imperial Star Destroyer came this way. This is not shipping related, but make sure you sign up for the VIP program if you chose to buy your LEGO sets from S@H, because you get 5% back to be used on later purchases. It is free to do so and it pretty much equals the cost of shipping, if free shipping is not available at the time.

eBay: While not considered a primary retailer like Amazon or S@H, I felt I should include them because eBay is where you can find great deals and also where you can get majorly scammed if you aren’t careful. This is where you get all those LEGO sets that have hit EOL(End of Line...or in layman's terms, retired) and you just never got around to getting it while it was on store shelves. There are a variety of sellers on eBay, from large primary retailers like Toys R Us to small Mom and Pop sellers, selling one or two items at a time. You see the best and worst of people on eBay, so be very careful when buying sets on eBay. Always look at the sellers feedback, I spend hours looking on eBay for steals on LEGO sets, a lot of that time is looking at seller's feedback. Look for the top-rated sellers, getting this distinction from eBay does not come easy, a seller has to make hundreds to thousands of high-rated transactions, including outstanding shipping ratings before they can be included in this group. Always ask for more pictures of the item if you are unsure or cannot tell the condition of the box from the pictures provided. Always email seller prior to purchasing and explain that you are a collector/investor and the condition of the box is a factor. You can ask for expedited shipping and usually the seller will not have a problem in accommodating your request because you will be the one paying for the shipping. The best way I have found to get a set in the condition you want it is to buy from a collector who shares the same love for LEGO that you do.

Speaking of eBay sellers and in some cases, sellers from the popular LEGO parts site, Bricklink.com, there is one request that you should make of them when buying any MISB LEGO set...”Please place the LEGO box in an outer shipping box!” You don't know how many times I have received MISB LEGO sets wrapped only in brown shipping paper. The sets are wrapped carefully and neatly in brown, thin paper in most cases, but get easily crushed by Postal workers(USPS is the main shipper for eBay items). The inexperienced seller assumes the LEGO box will be fine with just the brown paper protection, but 99% of the time, the LEGO box arrives damaged when shipped in this way. Tell the sellers that you are a collector and box quality is important and to please ship the LEGO box within a proper-sized outer shipping box. Most sellers will do this with few issues.

Speaking of retailer shipping, this leads us to a few tips about shipping LEGO sets from a seller's point of view(eBay and Bricklink sellers):

• As stated earlier, use a properly sized outer shipping box to ship every LEGO set. The USPS Flat Rate Boxes are excellent choices for small boxes. ULINE is another choice for larger boxes. I like to reuse old Amazon or LEGO shipping boxes to ship a LEGO box.
• Wrap the LEGO box in bubble wrap, then use shipping peanuts or newspaper to pack the LEGO set within the shipping box. Newspaper seems to work better IMO and is a lot cleaner.
• Take pictures of the LEGO set before packaging, within the box and after when the box is sealed. This helps protect you from unscrupulous buyers and careless shippers.
• Use the proper type of shipping tape on the outer box and don't be cheap about it.
• Include a receipt within the box, notifying the buyer who sent the LEGO set and to thank them for their purchase. This is a nice touch and helps improve communication and feedback.
• I like to use the USPS as a shipping company. They offer the best deals. The Flat Rate Boxes are a fantastic value.

In closing I would like to say that there are many other places to purchase LEGO sets online and some of the tips I gave can be applied, as they are not only for the stores I mentioned. Most seasoned veterans in the game will find most of this article ‘’common knowledge.” This article was meant for LEGO investment novices to use a reference point when searching for their potential purchases. Personally, I demand my boxes(for now) in pristine condition. I only purchase in store, which allows me to hand pick the box I want and guarantee me the perfect box for my investment. There are issues with buying in store though. Number one, I cannot buy an older retired LEGO set in a Walmart or Toys R Us. Also, I might miss out on some fantastic on-line sales. Finally, I miss out on not paying state sales tax(in the US) if the LEGO set is bought from a retailer from another state. Do I pay retail all the time? Yes, unless there is a sale in a retail brick and mortar store. Do I miss all the big on-line sales? Yes. I am OK with that though because I know that the sets I do choose will make me money and I believe that a MISB LEGO set is worth more than a damaged LEGO set that was discounted. Bottom line is that getting a set shipped to my house is a crap shoot……and I don’t play craps.

Editor's Note: Here is another great article written by one of our members, stephen_rockefeller. Stephen also received 500 BrickPoints for having this article published on the site. Thanks for writing a great article that I am sure is beneficial knowledge to many of our members! -Jeff

You are browsing in the construction toys aisle of your local retail or toy store. You carefully look at the three main choices of building blocks: LEGO, Mega Bloks and KRE-O. You can’t decide which one to buy for your children –they all look the same on their boxes. This article outlines the advantages & disadvantages found in both LEGO products and inexpensive alternatives so that you can choose what’s best for you.

At the moment there are many alternatives to LEGO bricks on the market, the two main ones being Mega Bloks and KRE-O.

Mega Bloks, a Canadian company, was called “Ritvik Toys” when it started in 1967 and later changed its name to Mega Bloks in 2002. It quickly became one of the main players in the building blocks industry. Mega Bloks, over the years, have created everything from Smurfs to dragons in their products. Mega Brands (includes Mega Bloks, Mega Puzzles, Board Dudes and Rose Art) currently has over 1000 employees. There are four different types of Mega Bloks’ bricks:

• Maxi size, introduced in 1985, is intended for very young children. The blocks feature slightly rounded corners and edges and have tall rounded studs.
• Mini size, introduced in 1989, is designed for toddlers and preschoolers. The bricks, like Maxi size, have slightly rounded edges and corners. Mini size bricks are the same size as LEGO DUPLO bricks.
• Micro size, introduced in 1991, has sharp edges and corners and is for experienced builders. This size is the same size as ordinary LEGO bricks.
• Nano building system, introduced in 2004, is the smallest of all of the bricks that Mega Bloks have made and is not compatible with any other type of plastic bricks.

The LEGO Group has filed many lawsuits against Mega Bloks for the use of “their” studs and tubes construction system. LEGO believes that this is a violation of its trademarks, but most of their lawsuits have been unsuccessful.

Possibly after seeing the success of LEGO's girl orientated theme, Friends, Mega Bloks have decided to launch new “Barbie” and “Hot Wheels” (both by Mattel) themed sets next year (2013).

KRE-O is manufactured by Oxford, a Korean company, and marketed by toys and board games company Hasbro. KRE-O, unlike Mega Bloks, is relatively new to the industry and includes sets based on the recently released films Transformers: Dark of the Moon and Battleship, which were both based on Hasbro’s toys. KRE-O, which means “I create” in Latin, keeps growing in popularity ever since it launched in June 2011. KRE-O’s human figures are called Kreons, and look for the most part like LEGO minifigures. A third line of sets have been confirmed and will be based on the 2009 revival of Star Trek and a new 2013 sequel are to be released in the future.

Although brands such as Mega Bloks and KRE-O are seen as alternatives or copies, people still buy them simply because of the fact that they are the cheaper than good quality LEGO bricks. Plus, if a child has collected a lot of LEGO sets, then the kid’s parents buy him Mega Bloks sets, the bricks from the clone sets will still be compatible with official LEGO bricks. Many young children wouldn’t know the difference between LEGO and clones, so parents usually buy Mega Bloks and other copies, that look like LEGO, but are actually worth much less money.

Parents buy clones for their children because they are inexpensive, but there are also many disadvantages of buying non-LEGO building blocks/bricks. Many of the bricks that are included in Mega Bloks or KRE-O sets are of poor quality and do not go together well. Some builders combine clone bricks with LEGO bricks in their models; however, their creations are usually mismatched with dull coloured and loosely connected Mega Bloks and LEGO bricks. Mega Bloks is also known for having a substandard website (compared with LEGO.com) and limited support for builders.

Official LEGO products, on the other hand, are of great quality and are very durable. The LEGO Group has a team of designers that invent well-designed sets that children will eventually play with. One of the advantages of buying LEGO sets is that they don’t usually devalue in price, as there are many people willing to buy second-hand LEGO on auction websites such as eBay, etc. Another good thing about LEGO is that they have the rights to many exciting themes (such as Star Wars, Harry Potter, DC & Marvel Super Heroes, etc.), which have produce rare bricks and sets. LEGO also have an awesome website (LEGO.com) that boasts downloadable building instructions, games, video, an online shop, and many more exciting things. There are also lots of devoted LEGO fans, who connect with each other through the internet in forums and fan groups. Mega Bloks, unlike LEGO, has little fans and is practically ignored by LEGO enthusiasts.

Another great advantage of buying the different kinds of LEGO bricks (Quatro, DUPLO, Normal Bricks, TECHNIC, etc.) is that they all click into each other. DUPLO bricks slot nicely into Quatro bricks, Normal Bricks click on underneath DUPLO bricks and so on.

There are also two things that LEGO has, but Mega Bloks doesn’t. These two things are the TECHNIC building system and Mindstorms. TECHNIC uses beams and pins (instead of bricks) to build models. Some TECHNIC sets even come with electronic motors, lights and remote controls. These electronics are part of a sub-theme called “Power Functions” and they make TECHNIC vehicles & machines run. One other thing that Mega Bloks and KRE-O don’t have is a robotics system. The LEGO Group has created Mindstorms, a theme in which builders create a model out of LEGO TECHNIC elements then add the Mindstorms NXT brick (the robot’s “control centre”), three motors, and four sensors (which can provide information about obstructions, different colours, etc.). This makes a fully-fledged robot that can be programmed by using the included software on a computer. You can even make it move in the direction you want using an app on your Bluetooth-enabled smartphone.

The main drawback with LEGO products is the cost. The LEGO Group prides itself on having strict product control, which generates exceptional products. With good quality comes higher prices, and that’s generally why numerous parents go for the less expensive option(s) when it comes to construction bricks/blocks for their kids. But as the old adage goes, you get what you pay for. It doesn't take long for children to get frustrated with inferior quality bricks from KRE-O or Mega Bloks and toss them in the trash.

If you are planning on buying some construction toys for your children, my recommendation is to find out (if you haven’t already) what suits your child and buy that product. If you don’t know what is best for your kids, then I suggest going with good quality LEGO –even though it may cost more, it’ll last longer and is (in my opinion) better overall. Also, from the standpoint of collecting and investing, the LEGO brick is far and away the brick to pick. LEGO investing has exploded over the past several years has become the toy of choice for not only children, but adult collectors and investors as well. All in all, LEGO is the way to go in my opinion.

What kind of building toy do you and your children prefer? What type do you have the most of in your home? Share your opinion in the comments below.

This is a guest post by Nathan (a.k.a. Yodaman5556), who is a blogger, a Star Wars and LOTR fan, KFOL (kid fan of LEGO) and all-round LEGO fanatic. He enjoys spending afternoons experimenting (and building) with LEGO bricks. He blogs about LEGO news, information and rumours on his website, BrickExtra.

We Thank Nathan for taking the time to write this excellent article and have also awarded him 500 BrickPoints! Please check out his website BrickExtra, he does a great job covering LEGO.

I recently wrote an article, LEGO Bubble...Fact or Fiction, in which I compared the recent Baseball Card collectible's market bubble and its subsequent bursting, to a potential LEGO investment bubble. The main point of the article was to show similarities between two comparable collectibles' markets and to question whether or not the LEGO collectible's market would crash and burn like the Baseball Card collectible's market did several years ago. While doing research for the article, I came across another very similar collectible's market that might be even more closely related to LEGO than the Baseball Card market is...the Barbie Doll collectible's market. Take a look at a very interesting article, written by Nancy Colasurdo of CNBC.com, about the Barbie Doll collectible's market and see if you can see some very clear similarities between the two...

Copyright 2011 CNBC.com.

"They set out to buy a motor home and see the world," Holder said. "It was a very beautiful story."

Whether trying to assess the value of a doll found in an old attic or if it's worth buying the latest model of Barbie, Holder said it's worth consulting an expert. She felt it particularly gratifying to be able to give a retired couple $27,000 for a doll they brought to have appraised. They were astounded.

Van Patten is the author of The Official Price Guide To Dolls, but the resource material out there, in print and on the web, is vast and constantly updated.

"Whether you are new to doll collecting or have been doll collecting for years, you need to have a good grasp of doll collecting basics," Van Patten writes. "The basics you'll need range from how to value and identify your dolls, to how to protect and preserve your dolls, to how to photograph your dolls and get the best prices for them on eBay."

Denise Van Patten, a long-time doll collector and dealer of modern, vintage and antique dolls whose online home base is About.com, recommends that an aspiring collector explore the answers to these questions to get started: Are you interested in antique, vintage or modern? Are you interested in a narrow time period or one particular material? Do you want to collect based on a theme or variations of one doll?

That's one universal truth in doll collecting. Another is that whether it's Barbie, Madame Alexander, Russian or papier mache, words like "pristine" or "perfect" will drive up the value. At Patricia Vaillancourt's eBay store called Antique Dolls, the starting bid on a Jumeau — 19th century French doll made of bisque — in "perfect" condition is $6,200. A rare glass-eyed China doll, also described as "perfect," begins at $3,500.

"It's all about demand and what people will want to pay," Holder said.

For the purposes of investing, Holder recommends researching and consulting with someone who knows the business before making a significant purchase. In Barbie collecting, for example, dolls from the 1970s — a.k.a. "the Malibu era" — can sell for around $200. It is also important to keep up with what special editions catch hold and which ones don't. For instance, the artist series — in which dolls are dressed in clothes resembling the art of masters like Van Gogh and Renoir — is not as coveted as, say, Holiday Barbie, a tradition that began in 1988; only a limited number of each are sold annually.

There are two camps in the collecting world: Never Removed From Box (NRFB) and De-Boxed. For investment purposes, NRFB is ideal, but many collectors prefer to enjoy the dolls by displaying them out of the box." I do it for fun and love of the hobby," Holder said. "I play Santa Claus 365 days a year. It lets people recreate childhood memories, especially in the dismal days we have right now.”

"The Barbie market and values are strong," Holder said.

The latter price tag is a Guinness record set in May 2006 for "highest price paid for a Barbie doll in an auction" and is held by Holder's store. During her last auction, in November 2011, a doll sold for a whopping $19,000.

Typically, though, the money to be made collecting Barbie dolls revolves around acquiring vintage dolls that are, optimally, still in the box with all their accessories, including the stand. Barbie was launched in 1959 and that original version, where she's wearing a black-and-white striped bathing suit, can fetch between $7,000 and $27,000 depending upon the condition.

"There was a limited amount made," said Sandi Holder, author of Barbie, A Rare Beauty and owner of the Doll Attic in Union City, Calif. "It was in the news and it became controversial because mothers disapproved. More media attention drove up the demand."

In October, Mattel released 'tokidoki' Barbie, complete with a pink bob hairdo, tattoos and cactus friend, Bastardino. The dolls retailed for $50 and are, as of this writing, listed on Amazon.com starting at $400 and going for as much as $1,590. That kind of escalation in value is rare in a market where vintage or antique is typically the way to go.
In most cases, turning a profit in the world of doll collecting requires a great deal of research and patience. But a very recent example shows that trend spotting can be an exception to the rule.By Nancy Colasurdo, CNBC.com 12/23/2011

Why Barbie is a Real Doll of an Investment...

There are some very interesting similarities pointed out by the article between the LEGO and Barbie Doll collectible's market. The first one is the age of the two companies. The LEGO brick, as we know it currently, was launched in 1958, while the first Barbie Doll was produced in 1959. Another similarity of both markets is the importance of the box that the toys were sold in from the factory. In both cases, LEGO and Barbie Doll collectors and investors value the items that are still new and sealed in the original packaging. Known as Never Removed From Box (NRFB) in the world of Barbie Doll collecting and Mint In Sealed Box(MISB) in the LEGO world of investing, these two terms are one in the same. Regardless of whatever you would like to call them, it is the desired condition of the toy when one is collecting them for the purpose of investment. As with LEGO sets that have been opened, built and displayed and are called “used,” Barbie Doll has a similar classification called “de-boxed,” in which the Barbie Doll is removed from the packaging and displayed. By opening and displaying both LEGO sets and Barbie Dolls, the value of the collectible item decreases substantially.

As any LEGO collector or investor can see, the values of some Barbie Dolls far exceed even the most expensive LEGO set. The 10179 UCS Millennium Falcon has sold for over $4000 on several occasions, yet that pales in comparison to vintage Barbie Dolls selling for $27,000 or more. Now, there have been large LEGO MOCs(My Own Creation) that sold for more than $30,000 on EBAY, but the conventional store sold LEGO sets have maxed out under $5000. That being said, both markets are still remarkably similar. Most Barbie Dolls on EBAY sell for less than $100, very similar to LEGO sets. In fact, both LEGO and Barbie Dolls have similar sales numbers on EBAY in relation to total auctions on a daily basis...around 200,000 listings at any given time. They are both iconic toys and have been around over 50 years and have shown excellent growth in the toy industry and interest from child and adult fans alike.

So what's the point of this whole article and how does it really relate to LEGO collecting and investing? Well, for one thing, I wanted to point out that there were toy collectible items that were closely related to LEGO sets and bricks that weren't Baseball Cards and haven't suffered from a “speculative bubble” that burst. The Barbie Doll collectible's market is alive and strong and items can sell for top dollar, in the tens of thousands of dollars on occasion. The Barbie Doll collectible's market, like the LEGO market, deals with new and used items and box condition is of paramount importance to the value of the items being sold and there are hundreds of thousands of EBAY listings on any given day of Barbie Doll and LEGO items. These two markets have run a parallel course over the past 50 years to become two of the most known and most popular toy lines ever created. In my research for this article, I did not find any reputable or coherent mention of a Barbie Doll investment bubble and that is quite amazing considering the selling price of some of the more expensive, rare and vintage Barbie Dolls can be tens of thousands of dollars. As a strong believer in the LEGO brand and LEGO investment, I would like to think that success in a similar toy collectible's market like Barbie Dolls will translate into continued growth and success of the LEGO product line in both the primary and secondary LEGO markets and that it is possible for continued positive growth without the “speculative bubble” hanging over every LEGO investor's head.

On a final note, I would like to point out that there is a definite influence of Barbie Dolls in the new Friends LEGO theme. For years, the LEGO brick was considered a toy that was geared towards young boys and men, but the Friends theme was developed to draw interest from young girls and women, with Barbie-like minifigures, pastel-colored LEGO bricks and sets that reminds Barbie fans of old Barbie Doll Dreamhouses and convertible Barbie cars. This Barbie Doll influence on LEGO sets has been a profit windfall for The LEGO Group, with sales of the Friends theme far “exceeding” expectations and have sold twice as many Friends sets than expected(LEGO PRESS RELEASE) over the first half of 2012. This success looks to continue, with the Friends sets being sold at full MSRP and getting hard to find in various toy departments.

All in all, I found the article about Barbie Doll investing to be quite enlightening and very relative to the current LEGO investing and collecting market. The Barbie Doll and LEGO collectible's markets are similar in many ways and have been driving forces in the toy industry for over 50 years. I see both markets continuing on a positive growth path and while there are no guarantees in the investment world, investing in the correct Barbie Doll or LEGO set can be a very profitable endeavor...

LEGO PRESS RELEASE: http://aboutus.lego.com/en-us/news-room/2012/august/half-year-result_2012/

Definition of "Speculative Bubble":
A spike in asset values within a particular industry, commodity, or asset class. A speculative bubble is usually caused by exaggerated expectations of future growth, price appreciation, or other events that could cause an increase in asset values. This drives trading volumes higher, and as more investors rally around the heightened expectation, buyers outnumber sellers, pushing prices beyond what an objective analysis of intrinsic value would suggest.

The bubble is not completed until prices fall back down to normalized levels; this usually involves a period of steep decline in price during which most investors panic and sell out of their investments. (source: Investopedia.com)

There is a phrase used around the various LEGO forums that puts fear into the hearts of even the most staunch LEGO investors and collectors...bubble. As in “speculative” or “investment” bubble. The remarkable run up of prices of some retired LEGO sets has some investors thinking back to the days of the Cabbage Patch Dolls, Beanies Babies and Baseball Cards, and not in a good way. In each one of those cases, a type of toy collectible hit new heights in value and popularity, only to crash and burn a few years later and leave its investors with huge inventories of useless and worthless collectible toys. Is history destined to repeat itself again with the LEGO collectible's market crashing like the Baseball Card collectible's market did several years ago? Will the value of these high-priced LEGO sets and minifigures, with years of gains behind them, be wiped out in a couple of months, or few years at the most? Some very similar and scary comparisons can be made between the explosion of LEGO set values and some of the other collectible's markets that crashed, especially the Baseball Card collectible's market.

The Baseball Card collectible's market, unlike other flash-in-the-pan collectible's markets(Cabbage Patch dolls and Beanie Babies to name a few...), has been around a very long time(Baseball Cards have been around since the 1860s). Like LEGO sets, which have been around over 50 years themselves, Baseball Cards are an iconic collectible and childhood toy that are also collected heavily by adults. But are LEGO sets and their values bound to follow the same path that the Baseball Cards did, and if so, when will the “bubble” burst? Upon researching the topic of the collectible toy markets and the history of those markets, I found a very interesting article about the collectible Baseball Card market and its rise and fall. The article was written by Davis Jameison and was a brief synopsis of his book called Mint Condition: How Baseball Cards Became an American Obsession. I found the article to be quite interesting and eerily comparable in some ways to the current LEGO collectible's market. Let's take a look at the article and see if we can draw any useful comparisons to the modern day LEGO investing and collecting market:

This piece was taken from Mint Condition© 2010 by Dave Jamieson and was posted in an article in www.SLATE.com (Mar 24, 2010)

In 1989, the Upper Deck Co. would transform the industry with flashy, high-priced cards aimed at investment-minded collectors. As the sales of new sports cards swelled to more than $1 billion a year, children began to flee the hobby, turned off by the pricey packs and confounding number of sets. The baseball strike of 1994 ushered in an industrywide hangover that still hasn't ended. Revenues from new sports cards have fallen to around $200 million a year, roughly one-seventh of what they were at their peak. While vintage cards like the T206 Honus Wagner and the 1952 Topps Mickey Mantle have continued to soar in value, baseball card's boom times produced no such valuable merchandise. Those 1988 Donruss cards, once considered a savvy investment, can now be bought in bulk for around 1 cent apiece.

For those disturbed by such unseemly tales, the hobby of card collecting had begun to resemble baseball itself: an American institution that appeared to have strayed from its noble and innocent beginnings. Never mind that baseball cards, much like the game, had always been big business and always been a revenue machine. There had been nothing particularly wholesome about using baseball cards to shill cigarettes to grown-ups and children alike 100 years earlier. As Lew Lipset, an outspoken baseball card auctioneer, wrote in an issue of his Old Judge Newsletter in 1990: "Try to make a living in this hobby and you'll learn about … deceit, unfair business practices, the lack of truth in advertising, price manipulation, collusion, restraint of trade, insider trading, patronage, extortion, payoffs and bribes, graft, plagiarism and, last but not least, hype."

Precious few collectors seemed to ponder the possibility that baseball cards could depreciate. As the number of card shops in the United States ballooned to 10,000, dealers filled their storage rooms with unopened cases of 1988 Donruss as if they were Treasury bills or bearer bonds. Shops were regularly burglarized, their stocks of cards taken as loot. In early 1990, a card dealer was found bludgeoned to death behind the display case in his shop in San Luis Obispo, Calif., with $10,000 worth of cards missing. A few weeks later, Bob Engel, a respected National League umpire, was arrested for allegedly stealing more than 4,180 Score baseball cards, worth $143.98, from a Target store in Bakersfield, Calif., and attempting to steal another 50 packs from a Costco.

Unfortunately for investors, each one of those cards was being printed in astronomical numbers. The card companies were shrewd enough never to disclose how many cards they were actually producing, but even conservative estimates put the number well into the billions. One trade magazine estimated the tally at 81 billion trading cards per year in the late '80s and early '90s, or more than 300 cards for every American annually.

By the '80s, baseball card values were rising beyond the average hobbyist's means. As prices continued to climb, baseball cards were touted as a legitimate investment alternative to stocks, with the Wall Street Journal referring to them as sound "inflation hedges" and "nostalgia futures." Newspapers started running feature stories with headlines such as "Turning Cardboard Into Cash" (the Washington Post), "A Grand Slam Profit May Be in the Cards" (the New York Times), and "Cards Put Gold, Stocks to Shame as Investment" (the Orange County Register). A hobby bulletin called the Ball Street Journal, claiming entrée to a network of scouts and coaches, promised collectors "insider scouting information" that would help them invest in the cards of rising big-league prospects. Collectors bought bundles of rookie cards as a way to gamble legally on a player's future.

What none of us understood at the time was that Beckett's guides were probably creating card prices just as much as they were reporting them. When Beckett sued a competitor over copyright infringement in 1979, claiming that the rival had stolen his data, the judge noted that because Beckett's guides were "regarded as the authority in the field, it is entirely possible that the prices in [his] publication not only reflect market prices, but in fact can determine market prices."

American boys growing up in the 1980s approached Beckett Baseball Card Monthly with something like religious reverence. For many of us, it was the first magazine we bought and the only one we leafed through regularly. The magazine's circulation eventually reached about 1 million, with many of those issues no doubt destined for the book bags of young boys. We walked the school hallways in the '80s with our Becketts sandwiched between our textbooks, and we followed the price fluctuations of our favorite players with slavish devotion. Beckett's valuations served as the foundation for all card trades.

Eventually, Beckett would launch a monthly magazine and employ a team of 10 full-time baseball card analysts who would travel to card shows and shops, examine auction data, and sift through major league box scores to determine card values. He also made collector-investors more condition-conscious by including in his magazines one of the first card-grading systems, providing definitions for what he considered "mint," "excellent," "very good," "good," "fair," and "poor" cards.

In 1976, he launched a poll in the hobby newspapers, asking dealers and collectors how much particular cards had been selling for in recent months. Because collectors were inclined to juice the value of cards they had in hand, Beckett sought several hundred respondents so that egregiously high or low numbers would cancel one another out. The following year, he published a rudimentary price list whose valuations seem positively rock-bottom compared with today's: The 1952 Topps Mickey Mantle, now fetching hundreds of thousands of dollars in fine condition, was listed at $50. In 1979, Beckett and a partner, Dennis Eckes, released the Sport Americana Baseball Card Price Guide, which they started updating annually.

This loophole in the hobby would soon be closed by a statistics professor from Bowling Green University named James Beckett III. Beckett had grown up on Topps cards in the 1950s, and after lapsing in high school and college, he got back into collecting while pursuing a Ph.D. in statistics. Like Young and Miller, Beckett started checking into motels around the country during the '70s. The more dealings he had, the more he could see that no one had any firm notion of the market value of baseball cards.

One of Young's old colleagues, dealer Gar Millar of Wenonah, N.J., says the excitement was in wondering what would walk through the door: "You might find some beautiful collection that had unopened packs of cards. It was just thrilling." For the itinerant and well-informed hobbyist, it wasn't difficult to get a good deal from the non-collectors who showed up at the Holiday Inn, considering there were no price guides to govern transactions in those days. "You didn't know what anything was worth," explains Miller. 
"We'd pick an area of the country... say, Ohio... and take about a 10- or 15-day road trip," recalls Kit Young, who today owns a massive mail-order business in San Diego. "You'd take eight or 10 grand for a four-city hit. We'd rent a car, go around the towns, and we'd have ads in the local papers saying, 'Old Baseball Cards Wanted. … We'll be at the Holiday Inn.' You'd get one crack at them, and you paid by cash.”

By this time, the most aggressive card collectors had started crisscrossing the country in search of private hoards of cardboard that could be snatched up at bargain prices. Unlike school kids, these men were well-aware of baseball cards' status as a commodity... albeit an undervalued one...and many of these enthusiasts could credit their early transactions with turning them into wealthy men later in life.

Around the mid-1970s, a small cabal of serious baseball card collectors grew wise to the fact that their cards had become valuable. Cards had almost always had prices attached to them, even when prolific collector and cataloger Jefferson Burdickbegan sending out his Card Collectors Bulletin in the 1930s. But cards that had been worth a few cents were now worth a few bucks, and some of the rarer specimens, such as the T206 Honus Wagner, were commanding hundreds and occasionally thousands of dollars apiece. The number of trade shows sprouting up in the East and the Midwest testified to a growing market.
How come that Frank Thomas rookie card you stowed away in 1990 is now worth less than a Happy Meal? Chalk it up to the baseball card bubble of the late 1980s and early 1990s. In a new book, Mint Condition: How Baseball Cards Became an American Obsession, Dave Jamieson tells the story of how baseball cards evolved from a tobacco marketing gimmick in the 19th century into a massive, big-money industry of their own by the late 20th century. In this excerpt, Jamieson explains how baseball cards first became seen as promising investments, setting the stage for a decade of speculation and overproduction.
By Dave Jamieson|Posted Wednesday, March 24, 2010, at 12:01 PM ET, www.SLATE.com

The Great Baseball Card Bubble
Before tech stocks and McMansions, there was cardboard...

...Very interesting article. I have read many forum posts over the years relating the Baseball Card bubble to the current LEGO situation. There are definitely some parallel points that should be acknowledged, yet there are some huge differences between both. Let's take a look at some of the similarities...

• Both markets were originally designed for children and have had a large influx of adult investors get involved later in the lifespan of the collectible.
• Both markets are iconic and have been in existence for 50+ years.
• Both markets have thousands of different variations and new ones are released on a yearly basis.
• Both markets have price guides that keep track of current prices and trends.
• Both the LEGO new collectible and secondary market and the Baseball Card new collectible and secondary market remain two of the largest and active collectors' markets in the world today. If you take a look at the EBAY auction listings for instance, there are millions of EBAY auctions for Baseball Card items on any given day in the United States. LEGO auctions in the United States are in the hundreds of thousands on a daily basis, and probably equal to that in countries across Europe and the rest of the world. Both the LEGO and Baseball Card markets rank right up there with Stamp and Coin collecting markets, which are the largest collecting markets in the world.

Those are the basic similarities I see between the LEGO and Baseball Card markets. They are quite substantial, yet the differences that follow outweigh the similarities in my opinion. Let's check them out...

• While both markets have a wide range of age groups that participate in the collecting, the Baseball and Sports Memorabilia market, in general, is an adult driven business. The majority of LEGO collectors, fans, users or whatever you would like to call them...are children. By a vast majority in fact. Look at the most successful themes in the LEGO brand...Ninjago, Friends, City/Town. All are geared towards the younger crowd. While the Baseball card industry does sell a substantial amount of Baseball Cards to kids, the investing and larger portion of card sales is mainly by adults. LEGO sets are bought by all ages, but the majority of LEGO sets are still bought by children, even with the uptick in LEGO “investing” as of late. Kids don't invest. They collect LEGO sets and bricks to build bigger and better creations. Investing is the last thing on a kid's mind and it is this love of LEGO bricks that keeps the brand strong now and probably into the future as well.
• LEGO sets are played with and sold worldwide, in hundreds of countries. Baseball Cards are mainly an American phenomenon(Japan and a few Latin American countries notwithstanding). This point cannot be underestimated in importance. The love and interest in LEGO bricks in European countries is huge and helps build a strong base for the LEGO brand around the world. As the old saying goes, “The more the merrier,” and in this case, the more people buying and collecting LEGO sets, the better the secondary LEGO market will be after a set is retired.
• The LEGO Group does not release billions of sets every year like some of the Baseball Card companies did with cards and can at any time if they so choose. As a matter of fact, LEGO does a very good job of limiting sets(about 500 new releases a year) and keeping themes and ideas fresh. Lego retires sets on a frequent basis, while Baseball Card companies will release thousands of different cards yearly, with different versions for each player, watering down the market. Lego sets are just too expensive to produce and The LEGO Group doesn't want warehouses full of unsold inventory. Businesses as a whole today are much more aware of the dangers of excessive inventory and overproducing millions, or even billions, of sets(or cards with respect to the Baseball Card industry) is highly unlikely.
• LEGO sets are historically expensive. I have been playing with and collecting LEGO bricks for 35+ years and they have always been pricey. But that is a good thing if you are a collector/investor from a resell standpoint. There are some serious fans that buy LEGO sets and are willing to pay top dollar for quality, MISB sets, new or retired. There is value to a LEGO set. They are one of the highest quality toys you can buy. Baseball cards can be worth pennies, even new. There might be expensive old and rare Baseball cards, but the vast majority will never be worth anything more than pocket change. Heck, LEGO bricks are made of ABS(acrylonitrile butadiene styrene), which is a petroleum derivative, so it has to cost more to produce LEGO bricks over some small pieces of paper. LOL.
• LEGO was voted “Toy of the Century” by the Toy Retailers Association. Baseball cards are not a “toy.” Therein lies the main difference in my opinion. LEGO bricks are TOYS that can be collected. Baseball cards are pieces of cardboard that can be collected. Not to knock Baseball cards...I'm a huge NY Yankee fan and collected cards as a child, it's just that LEGO bricks have a special aura about them and are wanted and admired by all walks of life, by people from around the world. They are toys that can be used over and over and over again and enable its fans to explore their creative side. There is really no substitute for a toy such as LEGO. There are other lesser competitors, but the LEGO building brick is far superior and is loved more than ever. The LEGO Group has seen profits grow for 7 straight years, with no downturn in sight. Baseball cards on the other hand just don't have the broad support from children around the world like LEGO sets still do. Baseball Cards had their day in the sun, when Major League Baseball was the main sports draw in the nation, but that run is over. NFL Football has replaced MLB Baseball as the most popular sport in the United States and cards grew less important. It's adults that are keeping the Baseball Card business afloat, buying Mickey Mantle cards, not kids buying Derek Jeter cards. Technology has also put a dent in old hobbies like card collecting. Video games and smart phones are the new play toys for a lot of kids. But there is still a craving for people to utilize their imaginations and build something from LEGO bricks. The child LEGO collectors of today are the adult LEGO investors of tomorrow. It is this cycle that keeps The LEGO Group profitable, even in terrible economic times, and helps keep the values of LEGO sets at high levels.

The reader can see why some people linked the LEGO collectible's market with the Baseball Card collectible market. These same people also worried that the LEGO market is heading towards an “investment bubble,” in the same manner as the Baseball Card collectible's market crashed several years back. While there might be some strong similarities between the two markets from a logistics point of view, from a product point of view, they are quite different animals. Baseball cards are just that, cardboard cards. There is no real “play” value to them. A collector's value, for sure, but a child won't do anything really creative with them...a house of cards, maybe? Well, we all know what children and adults can do with LEGO bricks and the “play” value of them. The play value is what makes LEGO sets valuable and keeps children buying LEGO sets. This inherent play value has also made LEGO the third largest toy manufacturer in the United States. The LEGO collectible's market is a minor piece of the entire LEGO sales pie. The majority of LEGO sets are bought by and for children, not by and for adult investors, like the Baseball Card market was and still is. Adult investors on the various LEGO forums like to believe they drive LEGO sales. They do not. Maybe a small percentage of the retired and rare sets on EBAY or Bricklink are influenced price wise by these investors, collectors and resellers, but the vast majority of new and recently retired LEGO sets prices will not be affected by speculation in the secondary LEGO market in my opinion. New LEGO set prices will continue to remain high(as they always have been), regardless of the secondary market and some minor speculation. Several thousand or even tens of thousands of amateur LEGO investors will not outweigh millions of children buying sets for non-investment reasons.

The Baseball Card market imploded because the main buyer of Baseball Cards became adults looking to invest. The Baseball Card Manufacturers saw this shift in buyer types and proceeded to produce and sell billions of cards, flooding the market with worthless pieces of cardboard. Baseball Card sellers and collectors hoarded cases of cards, not realizing that the manufacturers were overproducing the product. POP...went the bubble. As I stated earlier, I really doubt that LEGO will ramp up set production so much that the market becomes flooded and worthless. They are better business operators than that. LEGO is very protective of its brand and does an excellent job with quality and keeping set values at a premium level. They retire sets on a regular basis and this keeps ideas and themes fresh and the secondary market ripe with new retired sets that might appreciate. If you notice, LEGO goes out of stock on various sets quite frequently on their Shop @ Home site and if they were the type of company to overproduce a product, you would never see that kind of message. They produce as needed. Some themes and sets are retired after one year due to poor sales or lack of fan interest, other themes and sets can go on for years if they are selling. LEGO adapts on the fly to the current market and trends, which is in my opinion, a very smart and successful business practice.

Now I'm not going to lie to you, the whole idea of a LEGO “investment/speculation bubble” scares me to death. I am heavily invested in LEGO sets and any talk or rumors of one makes me wonder if it is time to sell. I invested heavily in Technology stocks(NASDAQ) years back and lost my proverbial “shirt.” It got me thinking about my own collection and the LEGO secondary market as a whole. Is there a bubble? I mean, LEGO sets have appeared to go through the roof. $2000+ for a 10179 Millennium Falcon? $1100 for a 10182 Cafe Corner or 10030 Imperial Star Destroyer? $700 for a couple of San Diego Comic Con Marvel minifigures? There has to be a “bubble”...right? Well...maybe. Let's take a look at the definition of a “speculative bubble” again:

A spike in asset values within a particular industry, commodity, or asset class. A speculative bubble is usually caused by exaggerated expectations of future growth, price appreciation, or other events that could cause an increase in asset values. This drives trading volumes higher, and as more investors rally around the heightened expectation, buyers outnumber sellers, pushing prices beyond what an objective analysis of intrinsic value would suggest.

The bubble is not completed until prices fall back down to normalized levels; this usually involves a period of steep decline in price during which most investors panic and sell out of their investments.

The 10179 Millenium Falcon has “spiked” in value over the last year and a half. Same with the 10182 Cafe Corner. A ton of LEGO sets have exploded in value recently. It definitely has to be a bubble...right? Once again...maybe...or maybe not. In order to really tell if the LEGO collectible's market is in an investment bubble, we have to look at the broader view. In other words, we have to look at all LEGO sets and see if all or most of the sets are “spiking” in value in the past year or two. How do we do this? By using the mean CAGR, Compound Annual Growth Rate, for all qualified LEGO sets. In layman's terms, the CAGR can be thought of as the growth rate statistic that gets you from the initial investment value to the ending investment value if you assume that the investment has been compounding over the time period. It simplifies years of different growth percentages and gives you a single number that represents compounded growth percentage of an investment, in this case, a LEGO set. For our purposes in this discussion, when I say “qualified,” I am referring to the thousands of new and retired LEGO sets in our database that fit a certain criteria. We remove highly volatile sets like Collectible Minifigures and sets that do not have enough sales to make an accurate price guide for. We then take these thousands of sets in our database and calculate a mean, or average, CAGR value for the entire database. If we utilize the BrickPicker database and calculate the mean CAGR for July 2012 for all qualified LEGO sets, we found that the mean CAGR for those sets that qualified was approximately 10.6%. So, basically, the “average” LEGO set(which is based on thousands of LEGO sets in our database) increased in value(on an annual basis), from retail, 10.6% in July 2012. Of course, some sets appreciated better than 10.6% from retail and others less than 10.6%. Well, we know that the 10179 Millennium Falcon and 10182 Cafe Corner exploded in growth over the last several years, but is that indicative of the rest of the LEGO sets? The answer is no. The 10179 Millennium Falcon has a CAGR three times(33.4%) the LEGO CAGR norm(mean) and the 10182 Cafe Corner has a CAGR five times(50.57%) the LEGO CAGR norm(mean). They are exceptions to the rule. What about the rest of the LEGO sets? Is the CAGR “spiking” right now for most LEGO sets? Let's take a look...

We at BrickPicker.com have been collecting market research data from eBay's Terapeak program, which is their Market Research Division, for almost a full two years. I'm not an expert financial analyst or anything close to that, but I would think that a layman such as myself can see if the LEGO collector's market is in some sort of “bubble.” Data does not lie as they say. I mean, you should see some kind of large increase in value in the mean CAGR of the average LEGO set over the past two years at some time. See what I'm getting at? Has the average LEGO set CAGR increased dramatically over the past two years? The answer is NO. Without giving away too much of our valuable and expensive data, I can tell you that the average LEGO set CAGR(~10.6%) has actually dropped 0.1% from July 2011(~10.7%) to July 2012(~10.6%). I'll repeat...DROPPED 0.1%...or basically, for all intents and purposes, remained almost the same and/or the change was negligible. If we look at the data from 19 months ago(when we started collecting the Terapeak data), we will see that the average LEGO set CAGR went up 0.2%, from ~10.4%, with a small spike around December 2011, or Christmastime, of about 1.0%. After Christmas, the prices dropped to slightly below the average and then bounced back to around average a month or two later. Basically, with the exception of the Christmas holiday, the average growth of the average LEGO set, over the course of 19 months, remained flat...with only a paltry increase of ~0.2%. Even to a non-Certified Public Accountant/Financial Analyst like myself, I can tell you that ~0.2% growth in any investment over a 19-month period hardly qualifies as a “spike” in value of that investment.

So what does this all mean? The main questions I asked myself when I started this article were:

• Does the Baseball Card collector's market and its recent collapse in value have anything to do with the current status of the LEGO collector's market and future values?
• Is there a LEGO “investment/speculative” bubble at this present moment?

Well, in my opinion, the answer to the first question is no. Although there are some similarities between the two collectible markets and I can see why some people will compare the two, there are some huge differences that outweigh those similarities. First off, the Baseball/Sports Memorabilia collector's market is primarily an adult driven business. What was once a business geared towards children, it has been overtaken by an older clientele and companies that overproduce cards, thus rendering a good portion of those cards...worthless. LEGO sets and bricks on the other hand are geared towards children and primarily bought by children. Although there is an adult based collectible's market in the LEGO world, it is minor in comparison to the overall profit that LEGO makes from kids. It is possible that the LEGO secondary market(eBay and sites that sell mainly retired LEGO sets) could implode, yet the primary LEGO market(LEGO, Toys 'R Us and Amazon.com and other stores that sell mainly new sets) would not...because LEGO keeps prices stable and inventories at safe levels traditionally. It's just an educated guess, but I would say if the primary LEGO market remains strong, the secondary LEGO market will follow suit. On a final note relating to the Baseball Card bubble vs. the LEGO potential bubble, let me say, as both a Baseball Card fan and LEGO fan, that LEGO as a product and collectible is far superior in my opinion. At the end of the day, Baseball Cards do little to stir the imagination of children and adults and have limited playability. It is the playability and fun factor of LEGO bricks that may enable it to be voted “Toy of the NEXT Century,” and keep values strong and consistent.

As for the second question, “Is there a LEGO “investment/speculative” bubble at this present moment?” I'd have to say, in my most humble and non-Financial Analyst's opinion, that the answer to that question is also...no. To be quite honest with you, we were quite surprised when we ran the Terapeak numbers of the past 20 months and found that LEGO prices in the secondary market were remarkably stable. The mean CAGR for the “average” LEGO set(that is based on thousand's of qualified LEGO sets) over the course of 19 months changed very little, if at all. CAGR and LEGO set prices work hand in hand. Higher LEGO set CAGR...higher LEGO set prices, and vice versa. Prices for LEGO sets showed a combined~1.0% increase around the Christmas Holiday in 2011over the “average” industry wide CAGR value of 10.6% and dropped in January and February of 2012, yet bounced back to stable levels around 10.0-10.75% for the remainder of the months observed. I am curious to see if there is another uptick in LEGO set prices in December 2012 and a similar drop off in January and February of 2013. Regardless, it makes sense that LEGO sets go up in price around Christmas and drop off after the holidays. Sellers get premium prices when the significant others of AFOLs are scrambling to buy some rare LEGO set for that special gift for Christmas. Demand drops and money is short after the holidays, so EBAY auctions in January and February are weak.

So now the question is, ”I pay attention to LEGO set prices and they always look like they appreciate...I mean, look at the 10179 Millennium Falcon and 10182 Cafe Corner, they exploded in growth. There must be more sets appreciating like this. Why isn't the mean CAGR going up at a higher rate?” The truth is, there are plenty of LEGO sets exploding in growth. There are also plenty of LEGO sets that are NOT. LEGO investing and collecting is not as easy as some people think. People do lose money buying and selling LEGO sets. There are hundreds, if not thousands of LEGO sets that “depreciate” on a monthly basis and this makes a site like BrickPicker.com that much more valuable to the LEGO investor and collector. We give you, the investor, various data, tools and trends that enable a person to make educated buying choices. It's up to you to figure out which sets to buy and sell. Overall, LEGO sets are a solid and stable investment at this time in my opinion. With an average annual gain of around 10% for your typical LEGO set, you can make a profit if you choose the correct sets to buy and sell them when the timing is right. I lost money on my personal Brickfolio last month. I know why. I know what I did wrong and where the trends are heading. My investing strategy will have to adapt or I will continue to lose money. On a positive note, my investments have already appreciated thousands of dollars and tripled and quadrupled over the years, but it won't last forever. I will have to scan through the data and look for the next 10182 Cafe Corner. Other, newer sets will come along and appreciate better than some older ones that have peaked. Even some older sets find a second wind and become hot commodities at a later age.

The bottom line is, there is no LEGO “investment/speculative bubble” at this time in my opinion. The data shows stable prices and a solid collectible market over the past 19 months and there is no reason, besides a global economic meltdown or some other calamity, that it shouldn't continue. What's even more interesting, is that in the face of one of the worst worldwide recessions in recent history, the secondary LEGO collector's market has remained constant. There are no industry-wide “spikes” in values. While there are some LEGO sets that have exploded in growth, there are others that have not and have balanced out the equation to yield around 10% annually for the average MISB LEGO set. Just like stocks, some go up, some go down...it's up to the individual investor to make the right choices if you want to make money. Good luck in your quest for the next 10182 Cafe Corner...and remember, if the LEGO collectible's market does implode, people do make money investing when there is a “Bear” market. Just my final 2 cents...

The definition of Larceny is as follows:

Anyone who steals, or with intent to defraud obtains by a false pretense, or whoever unlawfully, and with intent to steal or embezzle, converts, or secretes with intent to convert, the property of another … whether such property is or is not in his possession at the time of such conversion or secreting, shall be guilty of larceny. … (Mass. Gen. Laws Ann. ch. 266, § 30(1)).

As Bob Dylan once wrote, “The times are a changin'.”  The term “larceny” and LEGO in the same sentence?  What is the world coming to?  Well, truth be told, I'm surprised it took this long for the crooks and scam artists of the world to infiltrate the innocent world of LEGO bricks.  LEGO sets and bricks are valuable toys and are highly collectible, making them targets of the con men/women out there.  I've been buying and investing in LEGO sets and bricks for years and have bought thousands of sets, from hundreds of sellers from around the world...and I've been ripped off numerous times.  I'm here today to share some of these stories with you and others I have come across in my journeys.  It is my wish that you learn from my experiences and prevent future monetary and time loss for yourselves.

Let's take a look at a couple of recent stories about con men who utilized LEGO sets in their scams.  Although the following stories are not from my personal experiences, they are a good way to illustrate how far and to what lengths crooks will go to make money involving LEGO sets and bricks:

Associated Press –Tuesday, May 22, 2012 

SAN JOSE, Calif. (AP) -- A Silicon Valley software executive put fake bar codes on Lego sets at various Target stores, bought the toys at a steep discount, then sold them online for thousands of dollars, authorities said.

Thomas Langenbach, 47, appeared in court Tuesday on four felony counts of burglary that could net him up to five years in prison if convicted.

He did not enter a plea. Authorities say Langenbach bought Lego sets at Target stores but covered their original bar codes with his own bar-code stickers to get a cheaper price.

Examples of his thefts included a $279 box of Millenium Falcon Legos he bought for $49 and a $90 Anakin Skywalker Lego set he got for $35, said Cindy Seeley Hendrickson, supervising deputy district attorney for Santa Clara County.

When police obtained a search warrant for Langenbach's posh home south of San Francisco, they said they found hundreds of sets of the colorful toy bricks, many of which he sold on eBay under the name "tomsbrickyard."

Authorities say Langenbach's house in San Carlos also was filled with Lego creations he had built himself.

Eight baggies of bar code stickers were found in his car, police said.

Langenbach works for German software giant SAP. His LinkedIn profile lists him as a vice president in a Northern California division.

He was already under surveillance by Target security officers who suspected him of the scheme when they spotted him at the chain's Mountain View store May 8. After he completed his purchases using the bogus bar codes, the store called police and Langenbach was arrested, authorities said.

"This particular crime, the way it was done, the sophistication, the amount of expenditure in time and money to do it, suggests there's something way beyond money that motivated him to do it," Hendrickson said.

Attempts to reach Langenbach, who is free on bail, were unsuccessful.

In another related story of a “second LEGO bar-code switch scam”:

San Francisco Chronicle – Friday, July 20, 2012

A San Francisco man has been charged with stealing pricey “Star Wars” Lego sets from Target stores on the Peninsula by replacing the bar codes on the boxes with ones that gave him steep discounts, San Mateo County prosecutors said Thursday.

Sound familiar? It should. Not so long, long ago, in a county not very far, far away, a Silicon Valley executive was charged with executing almost exactly the same fraud scheme at Target stores in Mountain View, Cupertino and San Carlos.

There’s no indication that Thomas Langenbach, the software company vice president charged in that case, was in cahoots with Donald Michael Morales, who is accused of pulling the scam in San Mateo County, prosecutors say. Apparently, they hit on the same idea independently, authorities believe.

“The label switch has been around for decades, but the ability to do so in a systematic way is newer,” said Al Serrato, an assistant district attorney in San Mateo County.

Morales, 44, stole at least 14 “Star Wars” Lego sets from Target stores in San Bruno, San Mateo, Redwood City and Daly City between Feb. 20 and April 14, prosecutors said.

He allegedly did so by pasting fake bar codes for $15.99 on the collectors sets, which are sold for $139.99. Morales then sold the Legos on eBay for closer to the store price, prosecutors say.

Security guards at the Target in Redwood City detained him April 14, and a check of other stores revealed him to be the suspect in additional thefts. He’s been accused of 14 felony burglary charges and one charge of grand theft.

Morales said he was out of work and needed money, according to prosecutors. He probably made less than $2,000 from his eBay sales, Serrato said.

A judge released Morales on Thursday on his own recognizance. He is to return to court June 28.

As you can see, these two characters got very creative in their LEGO scams.  But even with technical and unique approach to making a fast buck, their greed led to their ultimate downfall.  But most LEGO scams are not this elaborate, but they might be more prevalent.  One such common scam is called “drop shipping.”  Drop shipping is an auction site scam that occurs quite frequently to buyers on eBay and similar sites.  A crooked seller will list the “deal of a century” for an expensive LEGO set on the auction site.  The set will be $100+ in value and currently available from primary sources, like LEGO, Target, Walmart, etc...in order to maximize profits.  A set similar to a 10214 Tower Bridge or 10188 Death Star would be perfect candidates for this scam.  Basically, the con artist would sell a $400 10188 Death Star for $300-$350 as a Buy it Now.  Potential buyers would snap up these sets in droves.  The listing will look legit with photos and a generic description of the LEGO set.  The sale will be consummated through Pay Pal and the buyer will receive a brand new 10188 Death Star a couple of days later from LEGO or another large chain store.  The buyer will be happy, leave positive feedback and the cycle continues.

But wait...I said the LEGO set came from LEGO or another store?  Yes.  Basically the shady seller will use stolen credit card information to purchase the LEGO sets online and send them directly to your door.  The original listing will be from one person and the item will be shipped from another.  The addresses never correlate, but the buyer is happy because they got the new set, at a great price and won't bother looking at the receipt in most instances.  There was no reason to think the item was stolen or acquired through fraudulent means.  The seller will do this multiple times, to multiple buyers, over a short time span, so that the person that the stolen credit card information was taken from, will not realize there was any extra charges put on the credit card for weeks to come.  The unethical seller will even have a legit PayPal account to receive your “clean” money and eBay account, with positive feedback.  The seller can easily make thousands of dollars off of a week's worth of fraudulent transactions.

So you now may ask, “Why do I care?  I got my MISB 10188 Death Star for $300!  LEGO and eBay make lots of money.  I deserve a break!”  Well, for one, LEGO is getting smart to these practices.  They are starting to question orders in which the billing and shipping orders are different.  But even more importantly, they are freezing the LEGO accounts and MVP memberships of customers who received the questionable goods(if sold by LEGO).  How do I know this?  It happened to me.  I bought a 10223 Kingdoms Joust for $105 from an eBay seller.  It was a nice deal, but nothing special because I had to pay shipping costs also.  Regardless, it was a couple of dollars cheaper than the current lowest retail price, which belonged to LEGO, so I pulled the trigger and purchased it.  The 10223 Kingdoms Joust arrived in a brand new LEGO shipping box, with a LEGO receipt in it.  I really didn't know about the scam at the time, so I really didn't even bother looking at the receipt.  Mind you, I have thousands of LEGO sets and the UPS truck is stopping by my house on a daily basis, so unless the LEGO set is damaged in some way, I usually just put the box away.  Several weeks later I go to place an order with LEGO and the LEGO Shop website says to call LEGO customer service.  After a half hour on the phone with the LEGO representative, my name was cleared and my account was restored.  I had to submit proof that someone else sold me the 10223 Kingdom's Joust and submitted the eBay transaction data.

LEGO has begun a campaign to warn LEGO fans of such practices and want the LEGO community to pay attention and report such irregular and questionable activities.  They are putting the onus on LEGO buyers and are using the suspension of LEGO accounts as a wake-up call and warning to buyers that if a deal sounds too good to be true, it probably is.  eBay is also doing its share to stop drop shipping.  eBay is not immediately paying new sellers or sellers with low feedback scores money until an item is received and positive feedback is given.  There is also a time delay in hopes that fraudulent credit card use can be traced back to the criminal.  These are positive steps and I believe they are making a difference.  I have not seen any sorts of crazy deals from sellers lately on eBay, so I hope it is working.  It is up to the LEGO buyer to keep an eye on this unscrupulous behavior and report it to the proper authorities.

Drop shipping is not the only method the deviants use to rip off the LEGO buyer.  I'll call the next shady scheme, “The Shill Set.”  Basically, a dishonest eBay seller will list a high ticket item, like a $1500-$2000 10179 Millennium Falcon, sell it at a great price, collect the PayPal payment, obtain shipping tracking numbers, submit tracking numbers to eBay and buyer and NEVER SEND THE LEGO SET!  This has happened twice to me.  In both cases, a large and expensive set was bought, paid for and never sent.  In both cases, generic photos of the LEGO sets were used.  In both cases, the seller had decent feedback(more than 15 sales, but less than 50, which is usually enough to get paid immediately by PayPal).  This is the type of scam that takes some experience with the eBay system and some planning.  The shady seller needs to build up some positive feedback before pulling off this scheme.  They must set up a valid PayPal account, which requires a valid bank account.  It is all pretty risky, but the payoff can be thousands of dollars once again.  If they pull this scam off, five to ten times in a month, they stand to make $5000-$10,000 or more.

You may ask, “How can they get away with this?”  Well, they use the eBay system to their benefit.  First, they use generic industry photos of the item which are readily supplied by eBay themselves, instead of actual photos.  Second, they say the item will ship days after the auction and give some date two weeks in the future in which the item is to be received, thus giving them weeks to pull off additional scams.  And last...they use eBay's customer service and problem reporting system against them.  eBay wants a buyer and seller to work things out on their own and always want each to give the other some 'time' to respond to issues and concerns.  You, as the buyer, might know there is an issue, but once you contact eBay customer service, they put time restrictions of when you can and cannot open a case against a seller, thus giving the crooked seller even more time to take advantage of innocent LEGO buyers.  All in all, a con man might get a month or more after the initial transaction to sucker in other buyers.  Now, mind you, eBay does an excellent job of refunding your money after a case is opened, but you still are without the LEGO set and maybe passed on other great deals while you were waiting for this set to arrive.  Also, the aggravation of filling out case reports and time wasted is another issue for the buyer.  Two things a buyer can do to prevent this “shill” scam from occurring to them would be to ask for actual pictures of the LEGO set being sold and only buying from eBay sellers with 100+ feedback(or if less feedback, make sure other high ticket items were sold and received positive feedback).  These two simple preventative measures can make your life as a LEGO buyer much easier.

So far we have seen some major ways to defraud the LEGO-buying public.  How about some smaller scams that people need to look out for?  The first simple scam is when eBay or Bricklink sellers will list a set as “new” and remove the minifigures, thus making profit from the minifigure sales and from listing the item as new.  The box is new, the pieces are new, the instuctions are new, yet the shady seller will remove the minifigures and put in real small print somewhere in the listing that the minifigures were removed.  This is just deception at its finest.  I don't know about you, but when something is “new,” it means unopened and untouched, with all the pieces.  These slick sellers really get me angry because I blame myself for not thoroughly reading the “entire” listing.  How can I complain to eBay, when the seller actually has the notation written in the listing?  Just be leery of all listings and make sure you read everything so you don't get any surprises later.

Keeping with the crooked eBay and Bricklink seller theme, be wary of shipping charges.  This is another deceptive practice that the unscrupulous seller will use to make a quick buck off of inexperienced LEGO buyers.  Simply put, the seller will list an item at a fantastic price, say a MISB 10030 Star Destroyer for $300(Buy it now).  The buyer will say, “WOW, great deal!” and buy it immediately.  What they fail to realize is that the shipping charges were $400.  Ouch...It happens all the time and it has happened to me more than once I'm afraid to admit.  Once again, you can report the item and seller, but it takes weeks to come to any sort of resolution.  Some deceptive selling practices also take place on lower priced items.  A $10 small item with a $25 shipping fee is a very common site.  I report these sellers as much as I can, but a LEGO buyer needs to pay attention and read all the fine print before hitting that Buy It Now button.  If is sounds too good to be true, then I would move on to the next buying option.

A couple more of the simple LEGO scams frequently found on LEGO auction sites would be the mislabeling of non-LEGO sets and poor descriptions of real LEGO sets to mislead potential buyers, in order to increase profits.  Scan the LEGO auctions on eBay and you will find countless non-LEGO sets listed as and/or with LEGO sets.  These inferior products look like LEGO sets and to the layman, are LEGO sets...until the buyer sees them in person and realizes they were ripped off.  The sellers that list these as LEGO sets are plentiful and should be banned.  Buyers need to be aware of these sub-par building toys.  Another common shady practice is the incorrect and deceptive description of LEGO sets by crooked sellers.  As stated earlier, some sellers will remove minifigures and list the LEGO set as new.  Some characters will list a set that was built as new or new in box.  What?  Seriously.  The set was built and these con men will try and make a couple of extra dollars and say that the set was for display purposes and is “like new.”  Come on.  But it's done, every day.  Please read listings carefully.  Look for actual photos.  Protect yourself and your investment dollars.

This leads us to the last of the larcenous LEGO schemes.  This one involves the buying of LEGO sets from a large chain department store such as Walmart or Target, carefully removing the seals on the boxes and then skimming some parts from the complete set.  The box is then resealed and returned to the store.  The crooked seller will then resell the parts or minifigures on eBay or Bricklink and make a quick buck, with no investment.  This is probably the hardest theft or deceptive act a buyer or retailer has to deal with.  There is no way to tell if a set was opened, until it was actually built.  This could be weeks or months after a set has been returned and in most cases, the new owner of the set will just contact LEGO for replacement parts.  This type of deception can also happen with older, sealed sets.  For example, if a rare and retired set is sealed and some thief wants to remove valuable minifigures from say...a 10123 Cloud City set, and reseal them, how will a buyer know?  They wouldn't, unless of course the new buyer would break the seals and open the box, which they won't for fear of losing value on that highly collectible set.  It's a Catch 22.  On one hand, check the set and lose value or don't and never know what you bought.  The best suggestion I have for you is to use quality sources to buy LEGO sets.  Only buy from eBay and Bricklink sellers that have great feedback and numerous positive sales.  As for buying from the local Walmart or Target, avoid any sets that look tampered with.  If you do get stuck with a lemon, you can always return it. 

Well, that's about most of the major LEGO scams I know of.  Times are tough.  The worldwide economy is in bad shape.  Unemployment is high.  The criminals and shysters of the world have discovered that LEGO sets are a valuable commodity and are easily used to make a quick profit through unscrupulous means.  Some of these crooks might be good people at heart, but tough times force them to do things they wouldn't normally do to put food on the table.  Regardless of their reasons, LEGO investors and collectors need to protect themselves.  Take your time and be thorough when reading listings.  Read the fine print.  Look at the shipping charges.  Buy from reputable sellers that have great feedback.  Ask questions and look for real photos of the item.  Look for tampered boxes.  And most of all...if the price seems too cheap, it might be a scam.  I hope this helps some people avoid issues I have encountered over the years.  Please, if you see something that looks fishy, report the listing or item to eBay, LEGO or whatever source you are buying from.  It might just save another LEGO fan like yourself some future monetary loss and aggravation...

BrickPicker.com was designed and created with the LEGO investor and collector in mind. Through the use of eBay's Terapeak data, we have given the LEGO enthusiast current prices and growth trends of various new and retired sets. We try to keep our information and data fresh and accurate and give the LEGO investors and collectors out there tools in which to make smart LEGO purchases. One such new investment tool we have included in our LEGO set data is called the CAGR: Compound Annual Growth Rate. It can be found on the top right hand corner of the Set Guide page:

The compound annual growth rate, also known as CAGR, is a formula that is applied to an investment(in our case, a LEGO set) to help determine the investment's annual smoothed* return. The final percentage that you get upon calculating the compound annual growth rate is a smoothed rate of return that shows the positive or negative growth of your investment over a specified period of time.

The CAGR can be used by LEGO investors and collectors to understand what an investment has historically yielded on a yearly basis. Obviously, this formula can’t predict what the future yields of a particular investment(LEGO set) will be, but it can be used as a barometer to gauge the investment's future viability within the market. This number can also be used to calculate an investment's average growth rate over several years.

The formula for calculating the compound annual growth rate of an investment uses the number of years in an investment period and the nth root of a growth rate’s total percentage. The formula is fairly straight-forward.

Using this formula, we can create an example of a compound annual growth rate based on an amazing fictitious LEGO set. As we research the LEGO set, we see that it has solid annual growth and is probably worth purchasing. In the year 2009 our amazing LEGO set had a beginning value of $100.00 after it was discontinued (EOL...End of Line). In 2010 the set jumped to $120.00. Then in 2011 the set ended at $150.00 and by 2012 was a hefty $250.00 for a MISB set. If we place these numbers into our formula, it will look something like this:

The amazing LEGO set that we purchased back in 2009 had an annual return rate of 35.72%. Not bad!

Using the CAGR formula allows us to take an investment's measure by eliminating the volatility, or the up-and-down changes that occur during the fiscal year. Overall, this gives us a much better impression of how the investment is actually performing than if we looked at it month-by-month or even week-by-week. CAGR is especially helpful when you are making decisions on long-term investments.

One very common use of the compound annual growth rate of investments is to compare two potential investments side-by-side. For our purposes, two or more LEGO sets can be compared to one another. This allows you to get a feel for how they are performing over a long period of time and make educated buying decisions. This formula can also be used to determine the growth of various LEGO sets within your own personal LEGO collection and help you decide which sets are keepers and which sets are heading to EBAY to be sold.

You may ask, “Why do we need to know data like this, these are just LEGO sets, not some stocks or bonds?” Well, while it is true that the topic of interest on this site is LEGO bricks, those popular little plastic toys, it is also true that when discussing these said LEGO bricks, the terms money, worth, price, evaluation and investing are also used in correlation with LEGO sets and bricks. LEGO sets and bricks are just the medium, or commodity, we are interested in. Just like other investors use stocks, bonds, gold, oil or whatever to buy and sell for a profit, a good majority of BrickPicker members want to make money from their “toys” and are curious as to their LEGO collection's current value and future prospects.

The CAGR is a useful tool for the LEGO investor and collector because it levels the playing field when comparing LEGO sets. It takes into consideration the investment years and time frame a set has been on the primary and secondary LEGO markets. It also accounts for compounding, which other data does not. While the CAGR number in itself is not an exact number on a yearly basis(in that it does not total up exact annual growth rates and find an average), it is a very useful guide when looking at how LEGO sets compare to one another in annual % growth(or in some cases, non-growth). Regardless of popularity, theme or set size, the CAGR formula converts some basic data(MSRP at release, current price, investment years) for LEGO sets into ONE simple number that can easily be compared to other sets, thus enabling the LEGO investor and collector to make educated LEGO purchases. I hope you find it useful...

* The term "smoothed" in finance and accounting circles means to remove “peaks and valleys” from data and results

We would like to give a special thank you to one of our users TheBrickMeister (aka Brad) for enlightening us to this type of calculation. It's very valuable information that will go a long way to making the site better and more information for all of our users.

As a casual LEGO collector, I always keep an eye out for sets that are worth investing in. Obviously, the intention and goal of LEGO investing is ultimately to make a profit. Therefore, it is crucial for the casual investor to maximize their investment dollar which is usually achieved only after a set is retired, or in LEGO parlance, reached its end of life (EOL). It is no secret that the single biggest factor in LEGO investing and set appreciation is EOL. In simplest terms, no EOL, no profit.

For the LEGO investor, nothing is more eagerly anticipated and perhaps simultaneously dreaded than the three letters: EOL. For many casual LEGO investors, EOL comes far too fast and for others far too late. Many times EOL comes quite unexpectedly. One day a set is seemingly there and the next it is “Out of Stock” or “Call for Availability.” Neither is good if you are the LEGO investor on the outside looking in. There are many EOL theories and prognosticators to be found online with varying claims of purported LEGO sources and inside information. Amidst all the speculation one thing is sure: Unless you work for The LEGO Group (TLG) and have actual product life cycle knowledge, it is all just pure speculation and educated guesses. Regardless of this fact, it is nevertheless fun and potentially profitable to engage in this activity. Virtually every LEGO investor does it. Historically, TLG uses a maddeningly and infinitely flexible two-year EOL rule¹ where many sets see their production run end. I like to sum up the phenomenon with three main EOL categories or scenarios which I call: exception, perception, and deception.

Missing out on a great LEGO set is a gut-wrenching feeling that happens all too often for the casual LEGO investor. The two-year rule is nothing more than a vague LEGO barometer for when a set might go EOL. As with almost every rule there are exceptions...in this case many exceptions! Attempting to identify a bright line EOL rule is a true fool’s errand. The following examples are but a few exceptions to the LEGO two-year EOL rule. The first and perhaps most extreme EOL exception would be the Holiday Train set (10173). It was available for only one meager holiday season in 2006 and then poof. The original RRP in 2006 was $89 and today it is valued at upwards of $300². Granted this was a special occasion set, but still that short a lifespan is a tough pill to swallow if you had any hope of acquiring it. Another notable exception set that many casual investors may have missed out on is the Trade Federation MTT (7662) which was released in late 2007 for $99 and went EOL in late 2008 with just a little over one year in production. The value of this set today is nearly $400, which is a whopping 285% increase. One other lofty example of an EOL set exception to the two-year rule is the VW Beetle (10187) released in 2008 and reached EOL status in December of 2009 for a total lifespan of less than 20 months. The original RRP was $119 and the current value today is listed at about $350, a nearly 200% increase. Unfortunately, there are many more sets that fit into the exception category, like Market Street (10190) and Grand Carousel (10196) to name just two. Both of which make me feel like kicking myself for missing! These exceptions to the EOL rule highlight the perils and pitfalls of LEGO investing, and any investors that snatched up these exceptions to the two-year EOL rule were very fortunate indeed.

So we looked at a few exceptions to the two-year EOL guideline, now on to the bulk of the rule. It stands to reason that a rule should have a large number of examples that support it. In other words, for exceptions to exist, there must be a collective perception of what is supposed to happen. There are numerous examples of the two-year EOL rule that, if observed, still allowed casual investors to make a tidy profit. A favorite set of mine that falls into this category is The Eiffel Tower (10181). Released in late 2007 and going EOL in late 2009, this set is a great example of an almost exact two-year production run. The original RRP for The Eiffel Tower was $199. The current value now stands at an impressively tall $850, which translates to a not too shabby 326% increase. Another fine example of a great investment set with a routine two year production life is Jabba’s Sail Barge (6210). This awesome set was released in 2006 with a modest RRP of $75. Today this set typically commands a price exceeding $400 which equates to a 445% increase on investment. Perhaps the Holy Grail of the LEGO Modular world and the best example of the two-year production life cycle was set 10182 Café Corner. Café Corner lasted a full two years from 2007 to 2009. The mind boggling original bargain RRP of $139 has now ballooned to a staggering $1,136, for a 700%+ increase in value! Other notable sets that fall squarely within the two-year EOL sweet spot are the Taj Mahal (10189); the Green Grocer (10185); The Millennium Falcon (10179); Vader’s TIE Advanced (10175) and loads more. It is hard to claim any surprise or generate much sympathy for missing out on any set that stuck around for at least two years. Two years represents the common perception of the average LEGO production lifespan and is often the determining factor when facing an investment purchase of different sets: Go for the set that is the furthest along in its production run and you are usually safe. That is unless you are the victim of LEGO deception.

LEGO deception is nothing more than those sets that have outlived their welcome for the casual investor yet simply refuse to die a natural death. That is not to say that the general public agrees with that sentiment; in fact, they obviously do not or else these sets would not still be hanging around years after their debuts. A perfect example of EOL deception is the Medieval Market Village (10193). This set came out in 2008 and is still available today. Currently LEGO Shop at Home (S&H) lists this set as not being available until August of this year. Does this mean it is finally nearing EOL? The two-year EOL rule would dictate this result but this set seems to have some strong legs and remains very popular. It may still have some life left in it. The original RRP of $99 is still an outstanding deal. The current value is listed at about $92 which is a 6% decrease from RRP. Interestingly, the value of this set has actually increased 6% over the last month. It seems like investors might start to realize some modest gains in the next six months if it does end up going EOL this summer or fall. Another set that is still available long past the two year EOL rule is the Fire Brigade (10197). This set was released in September 2009 and was thought to be a likely candidate for EOL at Christmas 2011! As of today it is still going strong with no signs of letting up, even after the release of the Modular Town Hall (10224) in March. There has been much speculation surrounding the Modular theme and how many different active sets it can support at any given time. For several weeks this spring most major outlets did not have the Fire Brigade in stock, including S@H and Amazon. This led to a small bubble in value that has since popped and has now returned to near original RRP. Finally, one cannot ignore the biggest and most extreme example of LEGO EOL deception: The Death Star (10188). For many casual LEGO investors it was this set that brought them out of their Dark Ages. So it is somewhat ironic that this set is still available four years later! In fact, it is still a LEGO best seller on Amazon, even with a massive RRP of $399. Unfortunately, the current value is “just” $383 (It is probably selling under RRP due to sales from Toys 'R Us BOGO and reselling these sets on EBAY auctions for less than RRP) and certainly does not mirror the impressive fire power of the real and fully operational Death Star it so wonderfully emulates.

Many factors play a role in applying the LEGO two year EOL guideline. Certainly popularity, profit, theme and price all help to dictate the lifespan of a specific set and each one of those factors could be analyzed in great detail. For most casual LEGO investors, that is just not particularly practical or productive. For now, it is best to keep an eye out for sets that are nearing the two year mark and use your best LEGO judgment. One point that should be made though is that many LEGO sets, large and small, get discounted substantially right before EOL and you have to be very vigilant in your quest for these deals. The bottom line is, if you really want a set, buy the set. Don't risk reaching EOL and losing the set to higher secondary market prices in order to save a couple of dollars. As with any investment, there is a large element of chance involved, but that's the fun part, right? Jump too early and you may sit around with many large boxes in every room of your home and lose out on future sales and deals. Wait too long, looking for that big discount, and you will only wish you had many large boxes in every room of your home. Guess the EOL correctly and you can buy that LEGO set below MSRP and sell it two years later for triple the MSRP. As they say, “Timing is everything.”  
 

¹ All time frames discussed here are nothing more than approximations as TLG does not provide much transparency into the EOL process or actual production end dates.
² All values are for new sets and in US dollars and taken from Brickpicker.com.
 

Editor's Note: Here is another great article written by one of our members, Mos_Eisley. This article covers an issue that many collectors face and answers questions for those that are just starting their LEGO collections. Mos_Eisley received 500 BrickPoints for having this article published on the site. -Jeff

So you’ve decided to enter the dark and alluring world of LEGO investing. Soon you’ll be scouring the internet every day for all the best deals, stopping at every Target and Walmart (maybe a Toys ‘R Us here and there if you’re feeling lucky) you pass in the hopes of finding some great clearance discounts, and explaining to your significant other that this is not weird. But once you pick up all these great finds, what do you do with them? It doesn’t take long before a collection of MISB LEGO sets can become overwhelming:

I’ll get into specific storage ideas later, but first a little background on my experiences so far. When I first started dabbling in LEGO investing, I was able to hide my prizes away in a spare closet. It didn’t take long though before the sets became too much for the closet and started to spill out into the spare bedroom. While I thought it was awesome to have a room littered with sets, not everyone else in the house agreed. I soon realized that if I was going to continue doing this, I was going to need a better solution. After filling the closet and the rafters above the garage, I knew my only option was to get a storage unit. Obviously, renting a storage unit can really start to add up, so for most, making room somewhere in your house is a better option. Since I didn’t have any other choice, I found a nice, clean storage facility near my house and got myself an inside, 5’x10’ unit.

This was really nice. Now, every time I made a purchase, I just stopped by the unit and unloaded the sets. No more mess at home. For about two years I was able to contain everything very tightly packed in the 5’x10’ space. During this time I wasn’t selling any of my sets and it was time to expand again. I moved everything into another storage facility, using a 10’x10’ space this time. Once again, this was able to contain my collection for another two years. After this one was filled, I got an additional 5’x10’ unit to hold the overflow.

At this point, I felt that I had too many sets, too much money tied up and that it was time to start selling some of the collection. I had done a really poor job of keeping my sets organized. In an effort to maximize storage space, I had just packed everything into the unit from wall to wall and floor to ceiling so there was no way of getting to the sets in the back rows. I rented a 10’x20’ space and methodically moved everything from the smaller units into the larger unit. Although slightly more organized, I still had never invested in any type of shelving for storing my sets. I simply stacked the sets as tightly and as high as I could again:

After selling about half of my collection, I decided it was time to store everything properly. I invested in eleven metal racks from The Home Depot and I have been very happy with the results. My 10’x 20’ is now filling up, even with my inventory stacked all the way to the ceiling, but at least most sets are relatively easy to access.

The point of all this is to understand that storing MISB LEGO sets takes a lot of space. Putting away a few sets here and there isn’t an issue, but if you really want to buy a lot of sets, you will need a lot of space to store them all. Not to mention quite a bit of time, patience and money.

That’s a cute story, but how should I store my sets? Let’s take a look at some options:

1) JUST THE SET

Whether you’re storing your sets in a closet, cabinet, basement, attic or storage unit, simply take your sets and stack them on shelves, floors, or anywhere else you can find room for them. This is the least expensive method and it requires the least amount of space. Standing your sets like books is the safest method for protecting the boxes, and it also looks cool to see all those sets lined up like a LEGO set library:

LEGO boxes aren’t very sturdy, so when you start piling them on top of each other, the bottom box(es) will eventually collapse, which can lead to also damaging the boxes at the top of the stack if they go tumbling to the floor. A Chrome C-3PO vanishes every time someone stacks their investment sets in this manner:

If you have no choice and need to stack your sets unprotected, be sure to create an overlapping stack as if you were building with bricks:

Stacking like this will better protect the boxes and allow you to stack higher with less chance of your stack eventually crushing the lower boxes and tipping over. Regardless of how you store unprotected sets, try to avoid stacking them against walls and consider putting acid-free kraft paper between sets and/or any walls. Over time, the boxes can begin to stick to the walls and each other. You’ll want the sets close together though because bricks will settle at the bottom of the box when standing on edge. This pressure can cause the boxes to bow and the seals to sometimes break loose if there is space around the box.

The main problem with this method is that your sets are unprotected from dust and damage. The more you have to move the sets, the more shelf wear and other damage you are bound to cause to the boxes, potentially lowering your eventual return. Sure, a damaged, retired set will still fetch a fine price, but collectors will appreciate and pay for the chance of getting a pristine box.

PROS: inexpensive, easy, space-saving, you can actually see all your sets
CONS: no protection for your investment, stacking limitations

2) STORE MULTIPLE SETS IN LARGER BOXES

When I first started collecting for investment, this is how I stored my sets. When LEGO ships sets to stores, they come in cartons that usually have multiples of the same set. How many sets these shipping cartons contain depends on the set’s box size. Battle packs arrive in cartons of eight. Huge sets like 10188 Death Star and 10179 Millennium Falcon come one per carton. Sets like 7965 Millennium Falcon and 4184 Black Pearl come in shipping cartons that contain two sets. 7785 Arkham Asylum and 6210 Jabba’s Sail Barge came in cartons that had three sets inside:

There are many more sizes. These boxes are great because they are the exact size of the various sets you will want to store in them. Two 2507 Fire Temples can be safely stored in a carton that takes up nearly an identical amount of space as the two sets would take if they sat unprotected on a shelf. Not only are the sets more protected in general, but now you can safely stack more sets on top of these sets without having to worry about crushing them. Still use caution when stacking though because although LEGO ships sets in these containers, they aren’t necessarily the strongest boxes around. An overlapping stack of sets in their original shipping cartons is far more stable than the same stack of unprotected sets.

Not everyone has access to these shipping cartons, and not all sizes are ideally stored in their original cartons. I don’t want to deal with five or six small cartons of battle packs. Instead, I’ve found that the medium moving boxes from The Home Depot are perfect for storing 54 battles packs:

Using these moving boxes, you can easily and safely store and move a lot of sets at a time. The Home Depot has several sizes, but I find the medium ($1.12 each) and large ($1.36 each) to be the most useful. You can fill them up with quite a few of the medium and smaller sized sets, throw them in a closet and not have to worry about your sets being damaged the next time you need to move them. For extra protection, you can wrap each set in acid-free craft paper or bubble wrap when you place them in the moving box to reduce any possible damage from the sets sticking or rubbing against each other. Depending on the weather in your area, you may want to enclose each set in plastic to protect against humidity, regardless of which storage method you choose. Using moving boxes is a great way to go. For less than $2.00, you can easily protect many of your investments. Since LEGO sets vary in size, you won’t always perfectly fill the moving box, which means you are taking up a little more space than you might if you just had your sets stacked in the same space. However, using moving boxes will allow you to utilize vertical space that you can’t safely do with just the sets alone. Be sure to label the contents of your boxes so that you don’t have to dig through all of them to find the set you want!

PROS: better protection of sets, less expensive, easy, allows for vertical stacking
CONS: can take up a little more space, can’t see your sets

3) STORE SETS INDIVIDUALLY IN SHIPPING BOXES

I feel this is the absolute safest method for storing sets for investment. Although it is by far the most expensive and space consuming, I feel it is worth it to not only properly protect the sets, but also have them ready to ship:

As I said earlier, I used the second method when I first started storing sets. The first year I did a lot of selling, I found myself spending way too much time each night packaging orders. Since most sets were expensive and sold individually, I figured I may as well have the sets stored so that they were ready to ship. After switching to this method, the next time I sold it was a much better experience. I was getting the same amount of orders processed in less than half the time.

There are many sources for shipping boxes. My first shipping boxes came from boxes that were going to be thrown away at various stores. These were free. That’s about the only good thing I can say about them. They were often a little (or very) dirty, smelly, damaged, and you never knew exactly what sizes you might get. Shipping in boxes that aren’t the right size can cost you extra in postage and packing supplies, and possibly damage the sets if you don’t properly package them.

If you plan on shipping using the U.S. Postal Service, they provide free Priority Mail shipping boxes. Since most sets weigh more than 13 ounces, you will have to ship via Priority Mail, so you may as well use their free boxes. They come in various sizes that will work well with smaller sets like 9471 Uruk-hai Army, 4866 The Knight Bus and 7869 Battle For Geonosis:

Once you start getting into the larger sets, you’ll need to find another source for boxes. Uline.com is one of the best. They have just about every size you could ever need. I usually get three different sizes from them and these hold most of the sets I save.

• 19”x 12”x 3” ($1.06) – perfect for the $50-$60 sets that come in boxes like 6212 X-wing Fighter and 7628 Peril in Peru
• 20”x 16”x 4” ($1.46) – great for $75-$120 sets like 10219 Maersk Train and 6210 Jabba’s Sail Barge
• 24”x 16”x 4” ($1.29) – ideal for $100-$150 sets with boxes the size of 8038 The Battle of Endor and 10217 Diagon Alley

There are a couple other sizes I use as well, but this article is probably too long already! All the above boxes are sold in quantity minimums of 25. The more you buy of each size, the lower the prices, but you must buy in bundles of 25. You’ll notice that the smaller 20”x 16”x 4” box above is more expensive than the 24”x 16”x 4”. You can buy the cheaper 24” box and keep/ship those smaller sets in them, but for me I don’t want to waste the extra 4” of shipping box when I don’t have to.

The individually boxed method is great, but probably not for everyone. Buying lots of shipping boxes gets expensive. You’ll eventually get the money back when you sell the sets, but in the meantime you have money tied up in shipping boxes that you could have invested in more sets. The shipping boxes are also not the exact size of the sets, so there is usually a fair amount of wasted space around the sets. Generally, two sets individually boxed take up about as much space as three of the same set without any protection. However, my ultimate goal is to provide future buyers with sets that are in near perfect condition so it is worth it to me to lose some space and investment money. Like the above method, consider using acid-free craft paper, bubble wrap or plastic to protect the sets inside the boxes. Make sure to label the contents!

PROS: best protection of sets, can stack higher, sets are ready to ship
CONS: expensive, takes up a lot of space, can’t see your sets

4) A LITTLE OF EVERYTHING

I currently use a mix of methods two and three. Eventually I will use all three, having one of each set out for display, but right now I just don’t have the space for it. I like method three for the protection it gives sets and the fact that I can easily and quickly ship sets when the time comes for it. I like method two because it allows for a better use of space. I also individually box sets, then put them in the moving boxes so that I am able to safely stack sets higher than I could otherwise:

THE WRAP-UP

Regardless of which method you use, you will probably need some sort of shelving system eventually. Most stores like Walmart, Kmart, Lowes, The Home Depot and IKEA have many shelving options. I like these two that are available at The Home Depot:

The plastic one on the left is only $26.87 and the metal one on the right is $83.97. I chose the metal one since it’s a little sturdier and has easily adjusted shelves to maximize space. There are plenty of options between these price ranges, and more expensive ones.

For long term storage of sets, make sure to consider the weather where you will be storing them. LEGO bricks shouldn’t be stored in extreme temperatures. If your garage or attic will get below freezing or extremely hot, keep your sets in the climate controlled areas of your home. ABS plastic can handle temperatures from -4 to 176 ºF but that doesn’t mean that stickers in the sets and seals on the boxes will like those temperatures. Humidity can also cause damage to boxes and instructions, cause stickers to peel, seals to come loose, and various other problems if the sets contain metal or wiring. If humidity is an issue where you live, you should try to store your sets in air tight plastic bags if possible. If you keep your sets out, direct sunlight will cause fading to the box art.

One final recommendation is to keep your sets away from exterior brick walls and off the ground or floor! You probably won’t be experiencing really high flood waters, so just a few inches should do. If you keep your sets on the floor, boxed or not, and any kind of moisture comes in contact with them, you are going to lose a lot of value. You’ll likely have to open the set to find out what condition your instructions, stickers and parts are in.

LEGO investing is a fun, but expensive endeavor. Be sure to protect your investments!