'It's Almost Gone Feral': Adults Are Buying Lego For Enjoyment And For Profit
Original Article: https://www.newshub.co.nz/home/money/2020/10/it-s-almost-gone-feral-adults-are-buying-lego-for-enjoyment-and-for-profit.html
A customer services representative at Toyworld said adult Lego is currently the fastest growing category in-store. Photo credit: Toyworld/Newshub.
Although Lego is more of a hobby than an investment, people have made money buying limited edition sets and selling them at a later date.
Newshub asked a Lego enthusiast and a Toyworld customer services representative for examples of money made from Lego, and the risks of buying it purely as an investment.
As a prolific collector of classic Lego, Peter's Lego room is worth a tidy sum. As he's passed a lot of Lego through his collection, he estimates what he's actually spent is "dramatically more".
"It's not unusual for me to buy a used Lego collection worth $2000 to $3000 and move the majority of that back on again, to recoup the cost and keep the premium stuff for myself," Peter said.
Peter isn't a Lego investor - he buys it for enjoyment. For that reason his preference is that prices remain stable. But as Lego is expensive, he occasionally sells sets - even instructions - to help offset the cost of his hobby.
"There was a discontinued Taj Mahal set [in] 2007 that was $600 retail: I received a set of instructions for that set and sold them two years' ago for NZ$300. Six months' later, Lego relaunched the set for $600," Peter explained.
Genuinely rare and exclusive sets have sold for more money, as sellers take advantage of pent-up demand. One example is the Lego Technic 'Bell Boeing Osprey' set which had a retail price of NZ$280. Depicted as a search and rescue helicopter but viewed as a military vehicle, the set was recalled before it was released.
"Collectors who wanted them missed out and it immediately shot up to $2000 on eBay, dropping to around NZ$1000 now," Peter explained.
Most Lego investors make money through "scalping" - re-selling Lego when it goes out-of-stock.
After demand for the 2007 Lego 'UCS Millennium Falcon' set went up dramatically after it was discontinued, he knows of people sitting on the '75192 Millennium Falcon' set, which retails for NZ$1500. Although it's out-of-stock on the Lego website, it's available at toy stores.
"Some people have already stored these investments for three years, will need to wait out the set being discontinued, then wait in hope that there are enough people who missed out that are prepared to pay a premium for a new set," Peter explained.
"I'd say they're likely to need to hold the set for another five years before being able to return any profit," Peter added.
A customer services representative at Toyworld said during COVID-19 lockdown, sales of Lego, board games and jigsaw puzzles were the store's biggest sellers.
Currently, there's global demand on Lego. Supply is kept in-check and the store says consequently, demand is high.
"Lego is by far the biggest category in the store and the adult category is the fastest growing category.
"This whole 'collector' thing has started to evolve in the last three-to-four years: it's almost gone feral," the customer services representative said.
Aside from Lego hobbyists and collectors, people buying Lego as an investment focus on the 'limited edition' range. Some customers buy Lego in pairs: one to keep and one to sell.
"I [know a] Doctor who buys limited sets and holds them for five years, then he sells them and makes a profit.
"You'll get beyond 'it's no longer available', 'it's retired': he's buying the sets he believes will be in strong demand," the customer services representative added.
A collector set costs anywhere from $200 to $1400. Limited edition sets generally have a two-year shelf life. Lower-value sets, such as 'Lego Ideas', come in once.
"The first Lego set I bought, I bought it because I liked the look of the set, it retailed for $200: it's now on Trade Me for $950 - that's about six years' later," the customer services representative added.
But aside from those hoping to make a buck on the side, the store also sees plenty of hobbyists. One set that has been particularly popular in-store is the Lego Ideas Tree House.
"They get these sets, then they personalise them, e.g. with lights, flowers - one girl even put carrots on her tree," the customer services representative added.
As there's no way of knowing exactly when Lego sets will be 'retired' and if they'll be re-launched, buying Lego purely to make money is similar to picking stocks. Investors can do their research, buy what's popular and/or in limited supply and hold onto them in the hope the value will rise over time.
People thinking about Lego purely as an investment could compare it to the 'Beanie Baby' investment bubble.
"Consider it similar to investing in art [or] classic cars. Great for enthusiasts who enjoy the process and worst case scenario, end up with a stack of Lego to enjoy," Peter said.