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    LEGO Investing: Complete Sets vs. Parting Out


    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.

    Set No.NameYearRetailCurrent Price (new)Current Price (Used)CAGR
    10179UCS Millennium Falcon2007$499.99$2,549.10$1,779.0331.19%
    10185Green Grocer2008$149.99$659.40$487.2134.47%
    10182Café Corner2007$139.99$1,204.27$738.6043.14%
    Table 1. Examples of sets that have performed exceptionally well. Current prices taken from Brickpicker database on 5/1/2013.
    Set No.NameYearRetailCurrent Price (new)Current Price (Used)CAGR
    7573Battle of Alamut2010$79.99$62.17$44.70-8.06%
    7572Quest Against Time2010$49.99$31.14$16.73-14.60%
    8078Portal of Atlantis2010$99.99$60.25$42.06-15.54%
    Table 2. Examples of sets that have delivered poor returns. Current prices taken from Brickpicker database on 5/1/2013.

    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.

    Set No.NameYearRetailCurrent Price (new)Value of Parts
    9471Uruk-Hai Army2012$29.99$28.34$58.66
    9472Attack on Weathertop2012$59.99$44.43$104.12
    9474Battle of Helm's Deep2012$129.99$112.55$239.10
    9468Vampyre Castle2012$99.99$81.07$179.13
    Table 3. Sets still in production as of April 2013. Set values taken from Brick Picker database on 5/1/2013. Parts value was determined by "Last 6 months sales average" on Bricklink on 5/1/2013.
    Set No.NameYearRetailCurrent Price (new)Value of Parts
    10179UCS Millenium Falcon2007$499.99$2,549.10$3,366.42*
    10185Green Grocer2007$149.99$659.40$628.50
    10182Café Corner2008$139.99$1,204.27$922.40
    Table 4. Set values taken from Brick Picker database on 5/1/2013. Parts value was determined by "Last 6 months sales average" on Bricklink on 5/1/2013.
    *It's interesting to note that $1,511.38 of this value is in the certificate of authenticity, stickers, instructions, and box.
    Set No.NameYearRetailCurrent Price (new)Value of Parts
    7573Battle of Alamut2010$79.99$62.17$131.14
    7572Quest Against Time2010$49.99$31.14$66.18
    8078Portal of Atlantis2010$99.99$60.25$134.78
    Table 5. Set values taken from Brick Picker database on 5/1/2013. Parts value was determined by "Last 6 months sales average" on Bricklink on 5/1/2013.

    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.
     
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    Strytlr, great job on this blog article. I thoroughly enjoyed reading it and I know its a topic that people know about, but don't know +/- or opportunities with parting out. It's a lot of work though and not for me :) I look forward to reading and posting future article from you!

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    Great article Strytlr! I have always wondered how some of those Bricklink stores stay in business, I never knew there was such a decent margin to be had in parting out some sets.

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    Thank you, Strytlr, for writing up this brilliant article showing both sides of the investing spectrum! We have gone over in the forums about either side of the argument before but seemed to never really get anywhere about actual good and bad points.

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    A very pertinent article, well done. If you search a set on ebay, usually 30-50% of the listings are for minifigures, parts, or portions of the set. No other collectible can lay claim to such value for incomplete items.

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    Very interesting, there are definitely opportunities for people who are willing to put the work and part out sets, but just by reading this I realize I am not one of them. Thanks for the article!

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    Thank you for taking the time to produce a well written article. It's tiresome to read some of the reviews that aren't written well. Nice job on this!

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    Great article, good depth and perspective. I hadn't taken the time to personally think about all of these pros and cons, so it was an eye-opener.

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    Love the article. Well thought out. I've done a small amount of splitting to make some quick money and it has worked pretty well. Attack on Weathertop was a good one last year. Bought at a discount and split up as minifigures and weathertop it doubled in value (which couldn't be said for selling the MISB which is also too big to fit in a Priority Mail box, which is a big issue for me). Keep in mind though that you'll still want to buy multiples of the set because each item is an individual listing so if you buy several your work pays off better. I've also split a few Star Wars sets buy just selling the minifigures, when purchased at a discount this often means that the remaining bricks are free or nearly free (they just cost your time). This has helped me get the bricks to complete some partial sets (rebrickable.com is a big help with this). I've found that chipping away at the number of bricks you need in this way *before* going to bricklink can cut down on costs. There are items that sell really well on Ebay as individual parts without setting up a bricklink store and waiting and waiting. Technic parts and plates are good examples, but again you'll need a fair number of any item to make it worth your while. I have found that it works well during the dead of winter when people are in the mood to buy Lego parts. As a rough estimate I'd have to say that selling parts can pay on the low end of the hourly scale. It can be rather depressing to realize that your big parts project paid you $5 to $8 an hour and selling sets paid $10 to $20 (or more). But that all depends on your perspective.

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    " A LEGO business certainly sounds like more fun than a lot of other things you might do for a living!" That is so true, nice article.

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    A question for anyone who can answer it regarding the piecing out of sets. For example, would I sell a minifig as a whole, or would I individually sell, the torso, the legs, the head, ect.?

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    Cashmoney-0, you could do it either way. I think most people sell minifigures whole, but I've also seen the parts for sale on BrickLink.

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    I imagine it depends how popular the minifigure is. If it's in high demand, I think you'd get more for it intact. If you really want to be sure, check eBay for prices on the fig, and then check how much the parts are going for on BrickLink. Every situation is different, so there really isn't one answer.

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    One question, Strytlr. I plan on reselling sets because here in my country Lego is more expensive, but I don't have enough money for a big initial investment. Do you think this approach would be better for someone like me (putting time aside)?

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    @Celes, I think it would depend partly on what the market for parts is where you are. I really don't know much about countries other than the U.S., unfortunately. I know that it's a bit harder to get customers on BrickLink with a small inventory. People tend to like to shop where they can find a high percentage of the parts they want. In other words, although parts in a set tend to be worth more than the set as a whole, parting a set isn't necessarily a way to make money faster. I think I'd agree with the advice I've seen here on BP, which is to try to flip sets for a smaller profit to build up investment capital that you can then use to start investing longer term. Just my 2 cents. Remember, I'm new around here, so my findings are based on research, not my own experience. :)

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    One of the things to consider when it comes to parting out sets is that there are hundreds of Lego fans who are also doing it. But they're not doing it so much for profit as much as to get the pieces they want and sell the excess. They may make some money, but it's on par with flipping burgers. So when your main competitors are essentially non-profit businesses, you have to do an amazing job to make more than them. But at least you can be your own boss and watch TV while you're working.

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    great article. thanks for taking the time to write about and share this information. I personally have never parted out a set, but I do have a few "dogs" in my inventory that I may try this with.

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    Yeah, I think it would be better for now to flip sets, as Relhak says there are too much people doing it, that in order to make it work it looks like you require to have a lot of variety to focus on this (at least as a small business).

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    Guest skfdlty

    Posted

    Nice article....I am in the process of BrickLinking a 10189 Taj Mahal. It is very time consuming especially since it is the largest LEGO set ever made.... A bit BUT is that it is way cheaper to BrickLink the Taj Mahal than to buy it used/new, and I get the fun of getting LEGO shipments fairly often with my pieces. Plus, I might end up selling it for $1,000+ after I have had enough fun with it. Nice profit if I can scrape together the pieces for less than $300. Over triple ROI.

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    Nice article. I'm very much in the MISB investor category. However, I am more than happy to dabble in splitting sets especially if I get one with a badly damaged box.

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