Lego may be a children's toy, but it also can be a viable investment strategy (as long as you don't mind storing them in your house!) Following are 4 tips to make the most of a Lego investment.
1) Be Patient
Very rarely with Lego can you buy a set one day and then ship it out the next. The most profit comes from making a smart purchase, and then sitting on it for some time until prices rise. After buying a set, do not be tempted to sell it even a couple months after purchase. Most times, prices dip before they rise again. But unlike other commodities, prices of lego always rise back again. The main reason for this is the rarer the set, the more the demand. Since the supply is limited (Lego has stopped manufacturing the set), prices rise in accordance. So don't be discouraged after buying to see the prices slowly deflate. Patience is key. Waiting out the slow decline in price will bring a period later on where prices slowly rise again. How long should you wait? Its really a matter of personal preference, but generally a year after the set is retired (not sold in stores anymore) is ideal. After that point, there is less buzz about the sets, so the prices level out.
2) Know the Market
Certain genres and sets do better than others, that much is clear. But how to chose sets and minifigs that will rise the most and give the best returns? To get started, bricklink's past price guide is an invaluable source. Take Medieval Market Village, for example. (Check our investment guide for it here). You might look at the set and think that it could be a good investment. In order to back up your hunch, check out bricklink's price guide. Here, the site is divided up into two columns, one for the past 6 month sales and the current items for sale. In this particular example, the average price for the set in the past six months was $104. Now, however, the average price for current items on sale is $175. Prices are on the rise, time to invest. Over time, hunches fueled by price guide information will show several genres of sets more likely to succeed than others. Generally, modular houses sell the best and have the highest gains. Look at Market Street, almost $2,000 now. Imagine you bought the set when it was selling for $90. You would have invested in a set that grew 10-fold.
3) Know the Minifigs
Sometimes, minifigs sell better than the sets that they came in. Selling minifigs is often easier than a set. While with a set the buyer requires a lot of capital (especially if you are selling at the end of the price curve, when prices are the highest), minifigs can be bought by a much wider audiance. Kids often want a full collection of lego star wars jedi knights, which opens up a much larger market. The key then to properly investing in Lego is to diversify the portfolio between minifigs and sets. Star Wars figures typically sell the best. Look at Star Wars clones, which I have been successful investing in. If you bought a bunch of these clones a year or two ago, selling them slowily at today's prices would result in a nice profit. Once again, use the price guide to prospect minifigs that you think will sell well in the future. Unlike sets, minifigs do not always rise in price later, so proceed with caution. If there is low demand for a figure at the beginning, the demand is unlikely to rise later.
4) Don't be discouraged (and how to cash in on the investment)
This is really just saying "Be Patient" once again, except in a the arena of selling. Once the time comes to sell your investment, list the wares, but then expect to wait a while. Rare and antique lego has a rabid market, but it does take a while for collectors to both notice the listing and then rally enough cash to buy it. There are several different marketplaces to sell Lego, each with their pros and cons (which I will go more in depth in a following blog post). Just know ebay will net the lowest amount but sell the fastest, Amazon will make you the most money but take the longest to sell and Bricklink will be vary. Still, don't despair when your sets do not sell right away. Just remember that you have a commodity that only a few people in the world have. Buyers will come.
Those are the 4 major broad tips to investing in Lego. Let me know though--do you invest? Are you looking to invest? Comment below to let me know!
1) Be Patient
Very rarely with Lego can you buy a set one day and then ship it out the next. The most profit comes from making a smart purchase, and then sitting on it for some time until prices rise. After buying a set, do not be tempted to sell it even a couple months after purchase. Most times, prices dip before they rise again. But unlike other commodities, prices of lego always rise back again. The main reason for this is the rarer the set, the more the demand. Since the supply is limited (Lego has stopped manufacturing the set), prices rise in accordance. So don't be discouraged after buying to see the prices slowly deflate. Patience is key. Waiting out the slow decline in price will bring a period later on where prices slowly rise again. How long should you wait? Its really a matter of personal preference, but generally a year after the set is retired (not sold in stores anymore) is ideal. After that point, there is less buzz about the sets, so the prices level out.
2) Know the Market
Certain genres and sets do better than others, that much is clear. But how to chose sets and minifigs that will rise the most and give the best returns? To get started, bricklink's past price guide is an invaluable source. Take Medieval Market Village, for example. (Check our investment guide for it here). You might look at the set and think that it could be a good investment. In order to back up your hunch, check out bricklink's price guide. Here, the site is divided up into two columns, one for the past 6 month sales and the current items for sale. In this particular example, the average price for the set in the past six months was $104. Now, however, the average price for current items on sale is $175. Prices are on the rise, time to invest. Over time, hunches fueled by price guide information will show several genres of sets more likely to succeed than others. Generally, modular houses sell the best and have the highest gains. Look at Market Street, almost $2,000 now. Imagine you bought the set when it was selling for $90. You would have invested in a set that grew 10-fold.
3) Know the Minifigs
Sometimes, minifigs sell better than the sets that they came in. Selling minifigs is often easier than a set. While with a set the buyer requires a lot of capital (especially if you are selling at the end of the price curve, when prices are the highest), minifigs can be bought by a much wider audiance. Kids often want a full collection of lego star wars jedi knights, which opens up a much larger market. The key then to properly investing in Lego is to diversify the portfolio between minifigs and sets. Star Wars figures typically sell the best. Look at Star Wars clones, which I have been successful investing in. If you bought a bunch of these clones a year or two ago, selling them slowily at today's prices would result in a nice profit. Once again, use the price guide to prospect minifigs that you think will sell well in the future. Unlike sets, minifigs do not always rise in price later, so proceed with caution. If there is low demand for a figure at the beginning, the demand is unlikely to rise later.
4) Don't be discouraged (and how to cash in on the investment)
This is really just saying "Be Patient" once again, except in a the arena of selling. Once the time comes to sell your investment, list the wares, but then expect to wait a while. Rare and antique lego has a rabid market, but it does take a while for collectors to both notice the listing and then rally enough cash to buy it. There are several different marketplaces to sell Lego, each with their pros and cons (which I will go more in depth in a following blog post). Just know ebay will net the lowest amount but sell the fastest, Amazon will make you the most money but take the longest to sell and Bricklink will be vary. Still, don't despair when your sets do not sell right away. Just remember that you have a commodity that only a few people in the world have. Buyers will come.
Those are the 4 major broad tips to investing in Lego. Let me know though--do you invest? Are you looking to invest? Comment below to let me know!
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