Investing times!

We recently had a visit from the Daily Telegraph (https://www.facebook.com/1377140522512570/posts/2814043702155571/) who were interested in the investment potential of LEGO.

I’m an old school LEGOist at heart, so all my sets are built, rebuilt, modified.. then eventually added to my collection of pieces ready for my next creation..

Others see LEGO creations as art – building them and framing or display-casing them to keep out the pesky dust..

Somewhere inbetween these are the investors, who I break down into 3 types..

Casual investors – hoping their built set will be worth a little bit more than it cost them, in the future..
.. if they bought it at 30+% off RRP when Tesco was burning off stock, and keep the instructions/boxes etc, they will be successful.. if not, I would worry they may be disappointed.

Stockpilers – buying up retiring stock with the hope that it will still be desirable and therefore valuable in the future..
.. choosing the correct licensed sets, especially ones with sequels due in the future, is essential to this venture.. buying up a ton of City sets because they’re 20% off, doesn’t always pay off!

Casual Profiteers – these are the folk who spot the bargains on the supermarket shelves or who sell their free promotional sets to help pay for their next purchase.
These are also, in my opinion, the ones who make the most margin on their investments!

Pitfalls
As with any investment, there are risks and costs – a few are outlined below..

Storage – a serious player will likely outgrow their LEGO-room or loft-space so will need secure, dry, cracked storage and this costs money.
Average storage fee is £50/month so if your LEGO isn’t going to appreciate £600 per year in value, you will be losing money.

Condition – for retired sets, collectors are your market so you must maintain the shop-fresh condition of the sets.. a small crease or scrape will devalue a set dramatically.
Stacking set boxes against a wall doesn’t always keep them in optimum shape, so covering them in clingfilm and using shelves or storage tubs will maximise your profit.

Duration – this is a tricky one.. how long do you keep your sets, before selling them?

Quick-win-seekers buy items they guess will be popular at a 25-30% discount in October, then resell them for 2x RRP in December, once the big retailers have sold out of the items in the flurry before Christmas – this is risky, but can give great returns.

Some investors play the short game, buy at 30%-off rrp and sell at 1.5x rrp. Then they can reuse their stake-money once per year.

Others keep for 2x Christmases before reselling, maximising the seasonal price increases.

Others still, have a grand plan to keep them until they need the money..
There is a science to this, but it’s an imprecise one. LEGO like to throw us curveballs by rereleasing sets or discontinuing themes.
These can make items less desirable as the item is only worth what someone is willing to pay for it.. if the theme is forgotten, then the price may drop and if a set appreciates too much, the number of interested buyers will wane dramatically.

Marketplaces – Always factor 10-20% sales + payment processing fees into your investment.
Choose your marketplace carefully – the ones with the best sales prices are sadly the ones which have the highest selling fees..
For example, you will save a fortune in fees on Facebook Marketplace but your buyers will often expect much lower prices.
Always check the prices of sold/completed items and how long it has taken the last seller to sell their item, to make a considered choice.

Taxes – HMRC classes items purchased with the sole intention to resell, as taxable. Whilst on a small scale, it is ok, but there is a requirement to declare asset sales exceeding £1000.

From my experience – you are unlikely to lose money on LEGO if you buy and sell at the right time, for the right price.
In my opinion the safest way to optimise your profits is to buy licenced sets at 30% off RRP just as they are retiring in October, and sell them at 1.5x RRP the following December.

Tell us what you think?!

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