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    Craigslist LEGO Flipping...A Newbie's Guide to Better Profits


    This article attempts to describe Craigslist experience of buying bulk Lego lots and provide some lessons learned from newbie perspective so others can benefit from experience and hopefully not make same mistakes that I've made..

    I've been fan of Lego since childhood, never really entered a dark age there was always a set or two or three around the house most of them were technic.  I seriously considered Lego investing 3 or 4 months ago and turned to Craigslist bulk buys to offset the burden of long term investment.  Below are my observations of the process, lessons learned and some real life examples of to date purchases.

    Observations:

    Targeting lots of sets is the easiest way to start- Buying Lego pounds and trying to resell them is a very difficult proposition, there are tremendous number of power plus sellers on E-bay that are doing Lego pound selling full time or nearly full time, competing with their prices, rankings in search results or supply sources poses a significant challenge to a newbie who is just starting out.  When you target Craigslist lots that have identifiable sets in them you at least know what you are getting and also know upfront the demand rate for those sets.

    Determining Your Price Limit -Lot of set is quite a bit more expensive then paying per pound with prices in a hundreds of dollars you need to make sure that you can recoup this initial investment before money exchanges hands. Unless I get a distinct feeling from the seller that he is a builder going into dark age or he is a pack rat that never misplaces anything I usually shoot for a purchase price of the lot to be 50% of the market price of the sets in it or 20% percent off asking price whichever is lower.  This leaves me with a lot of wiggle room in terms of money I can spend on rehab and a healthy profit in the end, or so I hope.

    Being a Fan of Lego is an absolute must-If you don't enjoy building, the whole affair will quickly become an exercise in frustration.  If you don't treat time spent rehabilitating sets ordering missing parts from Bricklink and then building those sets to photograph them for listings and then break them down piece by piece to verify completeness, as your personal fun time you will quickly realize that you are losing ton of money because you are making less than 2 dollars an hour.  If on the other hand you treat this endeavor as getting paid for something you are willing to do for free the process is quite enjoyable.  In my case I have a son who is a Lego addict and will build anything you throw at him as long as he gets a day or two to play with it and a better half who is willing to do a lot of dirty work like sorting and packing as long as she gets to build some of the Modulars with me.  In my case it became a good family past time that everyone enjoys.

    Restraining an evil AFOL -As you will see in the examples below it is essential you restrain your evil AFOL side and quit while you are still ahead.  That means you have to remember at all times that the set you are building is not for keeps and once you reach a certain dollar point of missing bricks it's time to call it quits and stop hitting order button on bricklink.

    Keeping Records

    It is also important to cost each set in a lot purchased according to its relative market value weight this ensures that you don't overspend or underspend when rehabbing those sets.  Needless to say that you need to be very meticulous in recording cost of each brick, plus shipping, that you ordered for every set you are rehabbing.  Once you start selling newly restored sets you need to keep an eye on your profit margin per set as well as your overall lot profit margin.  It is tempting to make an overall profit margin of 30% on a lot but if it means leaving items sitting for year on Ebay waiting for their buyers, time value of money concept kicks in.  In those cases a lower profit margin in a shorter time frame is preferable to a higher profit margin over a much longer period.

    Managing your expectations

    Even when dealing with the upstanding citizens you cannot make a purchase expecting that everything will be as described. Bricks could be cracked small little pieces could be missing, some sets might be beyond rehab.  You have to be ready to spend more money on top of the purchase price before you can make money with any CL purchase you make.

    Patience

    You cannot be pressuring yourself into trying turnaround those lots for sale ASAP.  It takes time.  Bricklink is a great resource but it's wanted list feature is totally outdated.  Trying to get the best possible price for missing bricks for 40 sets in your lot is the most tedious and time consuming part of the whole process.  Allow yourself to get frustrated and you will quickly give up.  CL flipping will not make you 100's of thousands of dollars overnight but it will help you subsidize your long term investments as well as scratch that itch to build stuff if you are AFOL.  

    Now let's look at some examples. 

    The profit shown is net before taxes.  That is I accounted for E-bay/Paypal fees, postage costs, packing materials, bricklinked bricks and of course the initial purchase price of the lot. First lot I purchased was a 5 gallon bucket full of individually bagged smaller to medium sets Atlantis, Sponge Bob, Cars, Toy Story, and probably two dozen of Series 2-4 minifigs. Total cost for that lot $100. Purchase date mi December. As you can see there were 47 identifiable set/minifigs in that lot.  To date I turned in a healthy  30%  profit and I expect the remaining sets to bring my profit margin to 41%.  This was a case of a pack rat and is atypical from what I've seen with my other purchases.

    Lot NumberPurchase DateLot CostQuantityBoughtQuantity AvailableBricklink CostGross RevenueCOGSRealized ProfitProfit MarginProjected Gross RevenueProjected COGSProjected ProfitProjected Profit Margin
    Lot 112/18/2013100471447.65476358.34117.6632.83%599.06423.94175.1241%
    Lot 1 Total  471447.65476358.34117.6632.83%599.06423.94175.1241%
    Grand   Total  471447.65476358.34117.6632.83%599.06423.94175.1241%

    Lot2-Was purchased around Christmas time and included mostly complete Star wars sets including 7676, my favorite.   Of course now that 75021 re-make is on the shelves the profit on this lot is uncertain, but I essentially broke even on it so I am not too concerned.  Here is how this one faired. Purchase price of that lot was $100.

    Lot NumberPurchase DateLot CostSum   of QuantitySum   of Quantity AvailableSum of   Bricklink CostSum   of Gross RevenueSum   of COGSSum   of Realized ProfitSum   of Profit MarginSum   of Projected Gross RevenueSum   of Projected COGSSum   of Projected ProfitSum   of Projected Profit Margin
    Lot 212/19/20131006126.78180.44184.99-4.55-2.46%313.45210.08103.3749%
    Lot 2 Total  6126.78180.44184.99-4.55-2.46%313.45210.08103.3749%
    Grand   Total  6126.78180.44184.99-4.55-2.46%313.45210.08103.3749%

      The first two lots  made me fancy myself an expert in Craigslist buying and then I purchased Lot 3. With this lot  I decided that it would be a good idea to play Russian roulette with a semi-automatic handgun and then when the gun functioned as intended I decided that I want to do it few more times.  A shorter version of it could be an Evil AFOL awakes.  Dealing with upstanding citizens buying first two lots made me believe in general goodness of human kind, lot 3 had proven me wrong.  Craigslist ad described a lot of 8 99% complete  sets including 7659, all minifigs and manuals.  My first clue that something was off should have been a really hurried kid that seemed very anxious to be on his way, but AFOL was salivating over Slave I in the open box so money exchanged hands. When I got home none of the minifigs were present, 7659 was not there and surprise the sets were not 99% complete they were about 75% complete mark.  Evil AFOL was at full swing hitting order button on bricklink ordering minifigs at  13 bucks a pop.  Below is the result of that fiasco.  Needless to say that when the responsible female population of the house found out, it got really loud I think the nicest thing I heard was something about looking for wife number 3, my eardrums were rupturing so I cannot be sure.  Purchase price of this lot was $190 and it was purchased around Christmas time as well. Bulk of the expenses came from minifigs, had I bought just missing bricks I would've broken even.  

    Lot NumberPurchase DateLot CostSum   of QuantitySum   of Quantity AvailableSum of   Bricklink CostSum   of Gross RevenueSum   of COGSSum   of Realized ProfitSum   of Profit MarginSum   of Projected Gross RevenueSum   of Projected COGSSum   of Projected ProfitSum   of Projected Profit Margin
    Lot 61/4/201419086171.0678.06386.14-308.08-79.78%299.23454.67-155.44-34%
    Lot 6 Total  86171.0678.06386.14-308.08-79.78%299.23454.67-155.44-34%
    Grand   Total  86171.0678.06386.14-308.08-79.78%299.23454.67-155.44-34%

      While recovering my hearing on the couch late at night I figured that it is time to get back on Craigslist and got my next lot. This one was the most fun  of them all It had  40 mostly complete sets from the 80's and early 90's, some of them I remember from my childhood.  5978, 6073, 6076 were just the few.  Purchase price was $500.   And the numbers for it are below.  This one and the promise of not building Parisian restaurant by myself put me back in good graces with the Mrs.  

    Lot NumberPurchase DateLot CostSum   of QuantitySum   of Quantity AvailableSum of   Bricklink CostSum   of Gross RevenueSum   of COGSSum   of Realized ProfitSum   of Profit MarginSum   of Projected Gross RevenueSum   of Projected COGSSum   of Projected ProfitSum   of Projected Profit Margin
    Lot 101/24/2014500382191.89405.76719.65-313.89-43.62%1,099.96921.79178.1719%
    Lot 10 Total  382191.89405.76719.65-313.89-43.62%1,099.96921.79178.1719%
    Grand   Total  382191.89405.76719.65-313.89-43.62%1,099.96921.79178.1719%

    The last lot I purchased was for 7 Harry Potter Sets and two star wars sets.  When I started sorting thru them, I quickly came to realization that this lot had 12 Harry Potter sets, all of them with minifigs, but no manuals.  This one put me back on track.  Here how this one turned out.

    Lot NumberPurchase DateLot CostSum   of QuantitySum   of Quantity AvailableSum of   Bricklink CostSum   of Gross RevenueSum   of COGSSum   of Realized ProfitSum   of Profit MarginSum   of Projected Gross RevenueSum   of Projected COGSSum   of Projected ProfitSum   of Projected Profit Margin
    Lot 132/6/20143001414111.8444890411.84-411.84-100.00%807.18599.08208.1035%
    Lot 13 Total  1414111.8444890411.84-411.84-100.00%807.18599.08208.1035%
    Grand   Total  1414111.8444890411.84-411.84-100.00%807.18599.08208.1035%

    And here's the overall performance of my purchases to date.  As you can see if you keep yourself in check you can expect 20% or more in net profit  in a relatively reasonable period of time.

    Lot NumberPurchase DateLot CostQuantity Quantity AvailableBricklink CostGross RevenueCOGSRealized ProfitProfit MarginProjected Gross RevenueProjected COGSProjected ProfitSum   of Projected Profit Margin
    Lot 112/18/2013100471447.65476358.34117.6632.83%599.06423.94175.1241%
    Lot 212/19/20131006126.78180.44184.99-4.55-2.46%313.45210.08103.3749%
    Lot 61/4/201419086171.0678.06386.14-308.08-79.78%299.23454.67-155.44-34%
    Lot 71/5/2014541125.64079.94-79.94-100.00%124.9999.0625.9326%
    Lot 101/24/2014500382191.89405.76719.65-313.89-43.62%1,099.96921.79178.1719%
    Lot 132/6/20143001414111.840411.84-411.84-100.00%807.18599.08208.1035%
    Grand   Total  11457474.861140.262,140.90-1,000.64-46.74%3,243.872,708.64535.2320%

     

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    Interesting read! I'm always very wary about CL lots. I'm discovering a few missing minifigures and missing parts as I build the sets in the bulk lot I purchased. I'm wondering if it is worth buying the missing minifigures for. So expensive!

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    As long as your purchase price is right it is possible to make decent profit even if you have to throw more money into it. I usually wait until I have enough to order and then spend few hours on bricklink trying to "optimize" my buying. Their wanted list needs serious redesign. I usually don't build the sets right away it gets very confusing because as you build them you can make small mistakes and miss the parts non-essential to structural integrity. I sort the lot first into seprate ziplocks by set and verify them with brickstore as a I go. That way I know exactly what is missing after that I order missing parts if the cost per set warrants it and then I build. After that I verify it with brickstore one more time as I take it apart.

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    I have done fairly well with my 3 CL purchases so far. 1ST purchase was only $25 and made my money back on that and had bricks left over for my daughter to use as she wants… 2nd purchase was for $500 w/ close to 50 sets and minifigs from series 7/8/9…..Still putting all of these sets together. All of the sets came with boxes, instructions, minifig’s and the stickers not attached. All of the pieces are there so far for the 10 sets or so that I have built…..Looking at a 50% to 75% or more profit for this lot. But the fun is putting them all together….They guy also threw in a six foot plastic folding table and a rubber made work station in the deal, so now my wife has an extra table for scrapping and I have a small workstation for whatever I need…..so win-win for the wife and I… 3RD purchase was for $60 and was a boxed Imperial Shuttle. The box was not in the best of shape but the seals are still intact, so I should be able to get at least 40% to 50% profit out of this one…. So far my CL buying is going rather well, but I have tried dealing with a few people that want to run their own auction among interested people….When I find those I just tell them I am out….

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    It gets better or worst :). I am now sitting on about $2K of bulk Lego sets, meaning that I have to go thru 200 pounds of bricks sorted by color and make sets out of them, plus order missing ones from bricklink, I'm seeing doubles at this point. But it is fun to find extra sets that in the mix that were not part of the advertised original deal. My experience so far with CL is positive but after all the expenses I'm averaging 20%-30% profit.

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    What is always difficult for me is to figure out - in case a lot buyed without any instructions - what sets originally belonged to it. Sure you can narrow down the search by looking for unique parts, but what to do if BL tells you that the part belongs to 5 different sets? Of course, looking for more unique parts, giving you a hint of which set you could find there.. this is what takes lot of my time with uncategorized lots.

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    They pop up quite regularly on Craigslist in my area. Ebay has them as well. Ebay's are normally very large and very expensive. 1.5 and 2K were the last ones I got from ebay.

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