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  • Buying LEGO in Bulk: The Filthy Dirty Not So Secret Side of LEGO Investing


    Migration

    While lurking in the shadows of this site I've read many differing takes on the ins and outs of investing in LEGO. The majority of those opinions center arround either long term investing or short term flipping and which sets are best suited for either. While those are both worthy endevours and I would not discourage anyone from either pursuit one angle of investing seems to be overlooked in most of the posts that I have seen. The missing strategy is buying LEGO in bulk. Where to get it, what to do with it, and how to use it to build your investment. Just as with any other investment strategy bulk has its own pros and cons, I hope to cover a few of them here. Full disclosure, I began my money making career on LEGO by flipping bulk lots and still spend much of my investing resources doing so.

    I've always prefered bad news first so lets start with the cons:

    1) TIME. With bulk, in general terms, the more time you spend on it the more money you make. At a bare minimum any bulk lot needs at least a simple hose down and a quick sort to remove as many non LEGO as possible. A fbulk lot treated in that manner would bring, on average, $5.00 per pound on eBay. To make any real money you need to spend the time to sort. Bricks sorted by color usually bring around $10.00 per pound. This assumes that you removed all minifigs and minifig parts. The real money in bulk is made by bringing sets back from the dead. The last loose 3181 I sold went for $46.00, had I sold it by weight I could have expected about $7.50. It took about 3 hours of work to sort/find all the pieces, but the extra return made up for it.

    2) Bulk is DIRTY. The last lot I bought smelled faintly of cat urine. I always wear gloves at first and wash using dish soap in a 5 gallon bucket, then rinse in a pasta strainer that is market LEGO so I don't use it for food. Some people wash in a sink or bathtub, but I have seen how hard it is to clear a clog. Also make sure to dry your LEGO. They will get moldy. Special note about bleach. DO NOT USE BLEACH. It will make your LEGO brittle and worthless.

    3) Hard to find/Competition. Good bulk lots can be difficult to find. As more people discover how much their old toys are worth this will only get worse. My primary tool for finding lots is Craigslist. With all its quirks and scams I've found it provides the most consistant results. Lots can also be found on eBay or bricklink, but you will pay more for them. I have yet to travel around to random garage/yard/rumage sales, but they also have potential to yield results.

    4) Unknown results. With bulk you never really know what you have until you dig in. Although, that's also one of the things that I like about it.

    And now for the positive aspects.

    1) Higher returns. The best bulk lot I ever found I paid $50 for. It consisted of 5 kitchen trash bags full of bricks. When I was done with it, after fees, I made $1,447. Time wise, I spent 80 hours sorting, cleaning and building. I will not touch a bulk lot unless I think I can make 3 times my investment. Most times when all sorting is done and fees are paid I hope to make about $15 per hour.

    2) Find COOL sets. I have 2 kids, a wife, and a mortgage. I don't have much in the way of disposable income, as such, I could never afford 10144, 6211, 7261, 7783, 6210, 4848, 4842...You get the idea. I have built all of those and more out of various lots that I have found. Once in a while I've found a gem that I couldn't part with such as a pristine (loose) 4195 that now holds a place of prominence above a bookcase.

    3) Low entry price. With patience a bulk lot can be found for almost any budget. Start small and reinvest the profits to work up to larger/better lots.

    4) Learn about LEGO. Part of the fun in building large numbers of sets is learning about LEGO. You start to see similarities between sets like the builds of 7260 and 7259. You eventualy can tell a Mega Blok by color and  can spot a valuable minifig (or a fake) a mile away.

    I'm sure that I've missed a ton on each side and the pros and cons of mint sets vs random bulk can be argued for ever, but for those just getting into investing in LEGO or those with limited funds bulk lots offer a viable alternative to start and a way to grow equity to invest in the more expensive boxed sets.



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