Why I stop buying LEGO ... for investment
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As a child with limited means, my collection back then was a humble small box or two of LEGO City sets. Yet I remembered the numerous times I played 'make-believe' and created much different transportation modes with my modest collection. The playing stopped when teenhood arrived.
Fast forward a few decades later (Yes, yours truly is THAT old), and I revisited LEGO with my two boys. With better purchasing power, their collection of LEGO was much better than mine. The fact that the boys have 3 LEGO playing areas in the house showed the extent of LEGO madness in the family.
Buying LEGO was never meant as an investment for me.
Most of the sets bought were opened and played like they should be. However, terminally, I made a little 'kopi' money with LEGO. These are additional sets I had on hand rather than sought after to make a return. These included sales of a group of LEGO Movie minifigures series (I love the movie, so I bought one for my son and myself), a group of Shell LEGO Cars (pump too much petrol) and a LEGO dragon playground (I thought my boys would like it but they decided otherwise). In such cases, the returns were as much as 50% in a year.
In recent times, LEGO investments have been highlighted in the press to fuel interest in LEGO. This was especially so when LEGO had made money for those that had invested in them a couple of years back.
Most of the sets bought were opened and played like they should be. However, terminally, I made a little 'kopi' money with LEGO. These are additional sets I had on hand rather than sought after to make a return. These included sales of a group of LEGO Movie minifigures series (I love the movie, so I bought one for my son and myself), a group of Shell LEGO Cars (pump too much petrol) and a LEGO dragon playground (I thought my boys would like it but they decided otherwise). In such cases, the returns were as much as 50% in a year.
In recent times, LEGO investments have been highlighted in the press to fuel interest in LEGO. This was especially so when LEGO had made money for those that had invested in them a couple of years back.
Then it dawned on me that society perceived LEGO as an ideal investment tool. That was when the magic of LEGO started to diminish. Instead of viewing it as a toy for kids, it became an adult's obsession. As such, it may have lost its intrinsic value among the younger generations.
Speak to any financial consultant, and they will tell you that 'investments' are meant for the long term. Such a divergence where adults' interest increased exponentially vs the declining interest in children may make 'investment' into LEGO a terrible idea for the future.
These are some telltale signs that LEGO investments may have been less profitable.
It is too commercialised.
It used to be that LEGO minifigures that represented famous movie characters were a rarity. That was why LEGO Star Wars was so popular back in the early 2000s. Now every other popular movie has a link with LEGO.
There are numerous Star Wars sets and even 'improved' versions of old groups, such as Millennium Falcon. Add the many other franchises, such as Marvel Superheros, DC Superheros, Ghostbusters, Jurassic World, Indiana Jones, Simpsons, Lord of the Rings, Teenage Mutant Ninja Turtles, Guardians of the Galaxy and even Lone Ranger (This List is NOT exhaustive!), this 'limited edition' position suddenly became overcrowded. It will be more challenging to spot a set that people would love to pay a premium for shortly due to this commercialization.
A possible victim of its own success, commercial growth may mean that LEGO sets may be abundant in supply. With these supply increases and potential decreases in demand due to saturation, a group may bring in fewer returns than sets of yesteryears.
Sets are more expensive, making returns challenging.
The latest Ghostbuster is set to cost a whopping US349.99 ( About SGD 505); at that price, it would be tough to sell at a considerable profit.
Locally overprice
In honesty, local buyers are taken for a spin. LEGO sets were already costing an arm and a leg. You might need to give up the other arm if you purchase it locally at retail. The same Ghostbuster set cost $599.90 in Singapore, a whopping 18% price increase compared to overseas purchases.
Nonetheless, if you are keen on investing, particular themes like this would make it more worthwhile. It will not be surprising to see the price rises to $800 after 5 years or so, especially if the set EOL (End of Life)
The catch is, where are you going to store this humongous set?
Rare is a relative word
Not all LEGOs are created equal. Investing in LEGO means more than just buying any set and waiting to collect profits after a few years. Popular Theme sets will be the ones that may rise in value. For example, the above LEGO Harry Potter Hogwarts Castle cost USD129 when it was launched in 2010. Today it will cost you at least three times as many new brands or twice as much when opened. A good investment indeed.
That thus begs the question...
Should I buy the set because it may get famous and increase in price, or should I buy it because my children love it?
Speak to any financial consultant, and they will tell you that 'investments' are meant for the long term. Such a divergence where adults' interest increased exponentially vs the declining interest in children may make 'investment' into LEGO a terrible idea for the future.
These are some telltale signs that LEGO investments may have been less profitable.
It is too commercialised.
 |
There are numerous Star Wars sets and even 'improved' versions of old groups, such as Millennium Falcon. Add the many other franchises, such as Marvel Superheros, DC Superheros, Ghostbusters, Jurassic World, Indiana Jones, Simpsons, Lord of the Rings, Teenage Mutant Ninja Turtles, Guardians of the Galaxy and even Lone Ranger (This List is NOT exhaustive!), this 'limited edition' position suddenly became overcrowded. It will be more challenging to spot a set that people would love to pay a premium for shortly due to this commercialization.
 |
A possible victim of its own success, commercial growth may mean that LEGO sets may be abundant in supply. With these supply increases and potential decreases in demand due to saturation, a group may bring in fewer returns than sets of yesteryears.
Sets are more expensive, making returns challenging.
The latest Ghostbuster is set to cost a whopping US349.99 ( About SGD 505); at that price, it would be tough to sell at a considerable profit.
Locally overprice
In honesty, local buyers are taken for a spin. LEGO sets were already costing an arm and a leg. You might need to give up the other arm if you purchase it locally at retail. The same Ghostbuster set cost $599.90 in Singapore, a whopping 18% price increase compared to overseas purchases.
Nonetheless, if you are keen on investing, particular themes like this would make it more worthwhile. It will not be surprising to see the price rises to $800 after 5 years or so, especially if the set EOL (End of Life)
The catch is, where are you going to store this humongous set?
Rare is a relative word
 |
That thus begs the question...
Should I buy the set because it may get famous and increase in price, or should I buy it because my children love it?
Beware of scalpers
Nowadays, it is surprising to see scores of adults queuing up at LEGO stores when there is a popular product theme launch. They would buy the items in cartons and,then, sell them at Carousell for a 20% price increase the very moment these sets are 'sold out'.
Children are left out of the equation.
As a result of scalpers and adult collectors, kids often need to be included in the equation. How often do you see a child at the store during product launches? Even if you see one, they are the minority. As a result, LEGO's target market shifted from kids to adults.
Children are left out of the equation.
As a result of scalpers and adult collectors, kids often need to be included in the equation. How often do you see a child at the store during product launches? Even if you see one, they are the minority. As a result, LEGO's target market shifted from kids to adults.
Today's kids would not be passionate about LEGO as much as their parents. I know because my boy's interest in LEGO has waned. This reaction will affect future demand for LEGO. Any price appreciation is about demand and supply. When the current generation of LEGO fans grows older and collects less, who will replace them to maintain the order?
The existence of a replica
There is a black market out there for replica LEGO sets. Some of the replicas are exact copies of the real thing. It would be tough to tell them apart if you do not scrutinize them. Furthermore, replica sets can be very innovative, and LEGO-inspired mini figures exist that LEGOs themselves need to be more productive of.
What are the latest LEGO sets?
No problem; the counterfeits can get it done in a jiffy. Kids would not be able to differentiate between genuine and replica LEGO. It would not be surprising that parents may buy replica sets for them. It would be a relatively easy choice at 1/10 of the price for some groups. (We are London relatively easy replicas, but merely stating the obvious)
The loss of the LEGO trademark
Before 2011, LEGO had been a monopoly. They are the only ones that can create excellent interlocking bricks. After they lost the patent, there had been numerous brands jumped on the bandwagon. Kreo is an example of LEGO. The replicas from China are another sign that LEGO is losing the 'exclusive' tag.
Box collectors
Collectors of LEGO are NOT building LEGO sets. Some will buy and just display the boxes. If you frequent the AFOL (Adult fan of Legos) forum, you will often see the fans posting pictures of several boxes of the SAME model; very impressive, but it voids the spirit of buying LEGO. Most of the time, these are meant to be resold later. These are not collectors but should be rightfully term as scalpers (see above point)
I have some boxes left unopened, but I have only 1 set each, and it is meant to be built if I can find the time and space to do so.
Some builders buy more than one set to build mega structures. These are the true AFOLs that I admire. Unfortunately, there are few far and few between. It takes deep pockets and not to mention massive storage space to indulge in LEGO today.
You only need one set.
In honesty, you only need one set of LEGO for kids. Take away all the popular licensing and themes; you will only have bricks. If I am to recommend a location to invest in, this will be it. It will cost only $89.90 per box. Get 2 or 3 boxes, and you can build a decent building. Get 20 boxes, and a mini-city will evolve.
Construct anything with it. Just use your imagination, and the creations will be limitless. Then, take it apart after it is done and rebuild a brand-new original design!
It is supposed to be a toy, not an investment.
I'm right; I will still get a set, provided the children would play with it, and I am not paying exorbitant prices. Most of the time, these would be obtained overseas (Australia, Japan, and even Malaysia are the cheapest places to get LEGO now). The LEGO set will be meant for building and not just kept sealed in a box.
Nonetheless, the child in me will still have an eye for unique sets that ultimately become decorative feature pieces at home. For these exceptional cases, I might get first and build later (especially for those large modular sets). So I will still buy LEGO, but only for what it is, a fantastic toy to encourage creativity and play in both young and old.
Or I could make an exception and buy a few boxes of the latest LEGO Disney Minifigures
or even the beautiful interpretation of Big Ben. Not.
Investments in LEGO provide different returns than before for scalpers. Falling demand and knockoffs are slowly eating up the profits. Have you seen the discounts on LEGO Simpsons Minifigures at 7-eleven?
LEGO can still be an investment, but not all LEGOs are equal.
Disclaimer
No LEGO was harmed in this article. We still LOVE LEGO, but as a toy, not an investment.
The existence of a replica
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| Spot the real LEGO |
There is a black market out there for replica LEGO sets. Some of the replicas are exact copies of the real thing. It would be tough to tell them apart if you do not scrutinize them. Furthermore, replica sets can be very innovative, and LEGO-inspired mini figures exist that LEGOs themselves need to be more productive of.
 |
| Lepin Fake Lego |
No problem; the counterfeits can get it done in a jiffy. Kids would not be able to differentiate between genuine and replica LEGO. It would not be surprising that parents may buy replica sets for them. It would be a relatively easy choice at 1/10 of the price for some groups. (We are London relatively easy replicas, but merely stating the obvious)
The loss of the LEGO trademark
Before 2011, LEGO had been a monopoly. They are the only ones that can create excellent interlocking bricks. After they lost the patent, there had been numerous brands jumped on the bandwagon. Kreo is an example of LEGO. The replicas from China are another sign that LEGO is losing the 'exclusive' tag.
Box collectors
 |
Collectors of LEGO are NOT building LEGO sets. Some will buy and just display the boxes. If you frequent the AFOL (Adult fan of Legos) forum, you will often see the fans posting pictures of several boxes of the SAME model; very impressive, but it voids the spirit of buying LEGO. Most of the time, these are meant to be resold later. These are not collectors but should be rightfully term as scalpers (see above point)
I have some boxes left unopened, but I have only 1 set each, and it is meant to be built if I can find the time and space to do so.
Some builders buy more than one set to build mega structures. These are the true AFOLs that I admire. Unfortunately, there are few far and few between. It takes deep pockets and not to mention massive storage space to indulge in LEGO today.
You only need one set.
In honesty, you only need one set of LEGO for kids. Take away all the popular licensing and themes; you will only have bricks. If I am to recommend a location to invest in, this will be it. It will cost only $89.90 per box. Get 2 or 3 boxes, and you can build a decent building. Get 20 boxes, and a mini-city will evolve.
Construct anything with it. Just use your imagination, and the creations will be limitless. Then, take it apart after it is done and rebuild a brand-new original design!
It is supposed to be a toy, not an investment.
 |
Nonetheless, the child in me will still have an eye for unique sets that ultimately become decorative feature pieces at home. For these exceptional cases, I might get first and build later (especially for those large modular sets). So I will still buy LEGO, but only for what it is, a fantastic toy to encourage creativity and play in both young and old.
or even the beautiful interpretation of Big Ben. Not.
Investments in LEGO provide different returns than before for scalpers. Falling demand and knockoffs are slowly eating up the profits. Have you seen the discounts on LEGO Simpsons Minifigures at 7-eleven?
LEGO can still be an investment, but not all LEGOs are equal.
 |
Disclaimer
No LEGO was harmed in this article. We still LOVE LEGO, but as a toy, not an investment.
#Notsponsored
screw the people who invest with a toys, toys is supposed to be as a toy !
ReplyDeleteits a buyers market. sink or swim
ReplyDeleteI would buy the Lego Disney Castle only because it's really iconic. The front is for display and the open back is a playbale princess doll house for little girls. And buy several boxes of simple blocks and wheels for truly creative play.
ReplyDeleteI like the Creative Expert Modular Houses, but at US$150+ a piece, it's not practical econimically or spacewise. And these seem to be FUN JOB for the creators but passively putting the bricks down from plan is not that challenging and after that it's not going to be torn down and rebuild anyhow.
I have the MindStorm EV3 which is really fun and it will last for a long time. I will likely get the Disney Castle sometime in the future. I bet this set will be in production for a long time ahead...
I'll watch Youtube for other people's Lego builds. :) Not interested in paying over MSRP for out of prodcution sets or knockoffs.
All valid points. I've started collecting technic sets as I feel they appeal specifically to new fans. Will see how it goes.
ReplyDeleteIt's annoying that while browsing other page, I'm persistently being directed to this particular page.. Not a wise move to do such "hijacking" activity.
ReplyDeleteHi there, do you have a specify page and which browser are you using? ( Phone or desktop)
DeleteWould be great to help us trouble shot the misdirect. Thanks!
I buy fake lego, because I'm not that rich, and I only bought marvel lego, because I like the videogame...now lego have video games, and collectors collect the figures and the video games...
ReplyDeleteShame on you.
Delete