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A digression on Scalping...

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Re: A digression on Scalping...

Postby Puddleglum » Mon Mar 09, 2009 4:50 pm

thepatient wrote:Do you have to have a business liscence and resale number?
Do you charge sales tax on an item that you've already paid sale taxes on?
Does the money you make count as income and you have to claim it?


These are sticky questions, and I am not an accountant. But I can say for sure that if you are running things like a business - systematically buying things for the purposes of reselling for a profit, generating a positive revenue stream - then you definitely need to report it as earnings on your taxes. However, if you're buying, selling, and trading LEGO strictly as a hobby (i.e. your bank account is not getting bigger because of your LEGO dealings), you generally do not need to worry about it. As for business licenses, sales taxes, etc, that stuff is all going to vary from state to state and the best thing to do is to check out your state and possibly county/city chamber of commerce website.
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Re: A digression on Scalping...

Postby Teekay » Mon Mar 09, 2009 6:03 pm

Tyrant wrote:Doesn't that just lead back to the question of how much profit is a "couple bucks" and how much makes you a scalper? Questions like that are why I, and others, have a problem with the argument. It seems to be highly personal and not in any way objective.


Try, MSRP + tax (if applicable). If you bought it on sale, it's your own discretion.

ThinkingImpared wrote:I just wanna know where you pull these numbers from...if you want to sell a set from your collection later on you have to make sure you don't sell for the going price and instead sell only a couple bucks over original retail price? What does that accomplish? The reason sets go so high is because a larger number of buyers are competing for a smaller number of sets. The same number of buyers get the sets either way...so I don't see how that solves anything.


Well, basically, gain a few bucks for your time, but don't scalp anyone. Basically "People helping other people." Kinda like our own BST. If you want, do what the guy I described did on eBay.

Puddleglum wrote:If decide to sell and old set from your collection, and you list it on Bricklink at a "couple bucks" over MSRP, when the going rate is, say, double MSRP, I can tell you what will happen. A scalper will buy it and resell it to someone else at double MSRP.


All right, maybe so. But at least you tried, and you didn't scalp anyone.

Tyrant wrote:I do not agree with lying in ebay ads to get sales. If I mention that a set is sold out, it is sold out. Having said that, anyone who only reads the very first one and doesn't look around has only themselves to blame for overpaying. This applies to an uninformed consumer of any other product. That's not to say they are stupid (or whatever other insult anyone may try to read into that, I know some people just don't have time), but as with anything else if you jump into a situation you don't know much about there is only one person who is at fault for the outcome.


Well, you are completely right there. However, some people do lie in eBay ads. I've seen it. I'm guessing you are one of those that don't.

Tyrant wrote:As a collector, I have bought far more than I ever bought in my amassing for resale. I have bought 5+ for my collection in one go. The most I have of any set to resell is 4. The most of any I have in my collection is 20 (and yes, they are all opened). So, the collectors and scalpers both buy lots of sets. All of those sets are sets that other customers won't get. Nothing can change that.


Well, by 20 I'm guessing you mean Battle Packs or other army builders. TLG expects people to buy several army builders, so that's no problem. If it is a non army building set, that is different. A collector will usually buy just one. A scalper (or whatever you prefer to call them) will often buy more than one. Maybe my estimate of five or ten in my last post was off. But they do buy more.

ThinkingImpared wrote:You're stereotyping. What if collectors buy 20 of a set to keep...and a reseller buys 1?


Okay, maybe for a BP a collector would buy 20. I've never heard of a "reseller" (*cough* synonymous with scalper *cough*) buying just one.

bigkid24 wrote:On buying multiple sets, how do you know the collector only bought one or two? I've seen collectors buy multiples and other collectors here have said they buy more than 1 or 2. Rather than just talk about scalping we should extend this to hording too if we want to talk about how a group of people "rob" others of the chance of buying a set.


But the collectors are building and displaying them. The scalpers sort of just "have" them until they sell them for profit. There is a big difference.

Tyrant wrote:And if they are? Are they wrong too? More importantly, how else are these people going to get the sets at MSRP? I assume they are willing to pay more because they can't get them locally and can't get them on S@H. Are they going to fly here to my local Wal Mart and buy them? Probably not. So, if I buy them to sell them, why should I put out the effort to do that only to sell them at MSRP thus actually losing me time and money? If others want to be super noble and do that to destroy the resell business on their time (and their own dime), they're welcome to it.


These people who want to buy sets at extreme price, can do so if they wish. They are not wrong to lose their own money. If they want to do that, it is their decision. If you buy to sell to them, try the formula above, plus $5 for your inconvience.

Tyrant wrote:And that is very noble (and I mean that). I sell things that way too sometimes. When I do I do it because I am positive they will sell close to market value and it is cheaper to list them that way. Maybe he just wanted to avoid high initial listing cost? I don't know so I don't know, but it's something to think about.


Well, from his description, he just wanted to get rid of them. But he wanted to get his MSRP back. So he just took whatever profit people were willing to pay.

ThinkingImpared wrote:If it wasn't his fault that people bought at inflated prices, how is it a reseller's fault that people buy at inflated prices? It seems to me you are contradicting your previous argument.


Simple. The "reseller" insists that you buy their merchandise at their price or not at all. This eBay guy was just letting people be as crazy as they wanted.

bigkid24 wrote:On the ebay guy, that's not a noble practice that's just good business. It costs less to start an auction at .99 and if it's a hot item it'll hit market price. The frenzy of the bidding war drives it up when people like to think they are getting a bargain, yet the auction ends at a higher price than a BIN listing that's $20 cheaper.


No, he is letting people pay however much he wants. He, in his nobility, is willing to take the risk that no one will bid and he'll end up selling it for 99 cents.

Puddleglum wrote:I'm curious if you own any stocks, bonds, or mutual funds. If you decided to sell some that you had held for many years, would you call up your broker and tell him you only want to sell them for a "couple bucks" more than what you paid for them?


I've said this before and I'll say it again. Lego and the stock market are completely different things. A great deal of our economy is based off of the change in stock prices. Maybe someone buys your stock for the going price, which is higher than you bought it for. Then a year from now, the buyer sells it at even more than they bought it for. They are clearly not feeling ripped off. If you buy Lego on eBay for $30 and you get it and it has 90 pieces, you will feel ripped off. Stocks are meant to be sold. Lego is not. Stocks are a gamble. You buy them, hoping their prices will increase.

One of the funniest things about this thread is all the synonyms for the word "scalpers" people have come up with.

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Re: A digression on Scalping...

Postby ThinkingImpaired » Mon Mar 09, 2009 6:30 pm

Teekay wrote:Okay, maybe for a BP a collector would buy 20. I've never heard of a "reseller" (*cough* synonymous with scalper *cough*) buying just one.


On Black Friday, I bought one (and later that day found another one) star destroyer for $60 at target. I plan to resell them both in the future. Maybe a collector wants to build a 20-foot star destroyer so he buys 20 sets for parts.


Teekay wrote:Simple. The "reseller" insists that you buy their merchandise at their price or not at all. This eBay guy was just letting people be as crazy as they wanted.


A big percentage of resellers auction their sets off on ebay, usually for about a buck starting bid. Is it considered okay for them?


Teekay wrote:If you buy Lego on eBay for $30 and you get it and it has 90 pieces, you will feel ripped off.


If someone bids $30 for a 90 piece set, they are willing to pay $30 for a 90 piece set. They won't feel ripped off; they know what they bought.

Teekay wrote:Stocks are a gamble. You buy them, hoping their prices will increase.


When the UCS Grievous went half off, I bought 2. Bad mistake. I thought they would've sold out fairly quickly but are still available even today, months after it went half off...clear example of a bad investment, it will take years for this set to go past $100 while many other sets will reach past retail price much faster. Anything you buy to resell is a gamble.
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Re: A digression on Scalping...

Postby Tyrant » Mon Mar 09, 2009 7:55 pm

Teekay wrote: Try, MSRP + tax (if applicable). If you bought it on sale, it's your own discretion.

As I said, anyone else is more than welcome to try this business venture. Everyone going on about morality can start buying sets to sell them this way and put resellers out of business. In the meantime, that formula is unrealistic. I presumably drove to get these sets. That's gas, which costs money. That's time, which is worth money. I would be listing them on Ebay, they have sellers fees. I would actually be losing money by your method. What incentive would anyone have to do that?
Teekay wrote:Well, you are completely right there. However, some people do lie in eBay ads. I've seen it. I'm guessing you are one of those that don't.

There's no need to lie. These things practicly sell themselves if you do it right.
Teekay wrote:Well, by 20 I'm guessing you mean Battle Packs or other army builders. TLG expects people to buy several army builders, so that's no problem. If it is a non army building set, that is different. A collector will usually buy just one. A scalper (or whatever you prefer to call them) will often buy more than one. Maybe my estimate of five or ten in my last post was off. But they do buy more.

Yes, the 20 is a battle pack. The most I have of a non battle pack set is 12 (tower raid). There are several I have 5 or more. The King's Castle Siege which I bought to sell, I have 4. I think you are making a generalisation that is as likely to be true as it is false. I could quite easliy envision collectors and scalpers equalling out in their combined purchases.
Teekay wrote:Okay, maybe for a BP a collector would buy 20. I've never heard of a "reseller" (*cough* synonymous with scalper *cough*) buying just one.

First, if it were something that were fairly expensive (let's say the current Falcon when it was onsale this last XMas), I would be very hesitant to buy more than 1 to resell.

Second, the constant attempts to keep equating any new term to scalper is exactly what I was talking about earlier. We all know the word scalper is being used for it's negative implications as the only definition that really fits is so broad that it's useless. You can't expect honest discussion if one side believes the other side is evil from the get go. It's the same exact mentality that makes things like religious debate a virtual impossibility. That's why people try to bring morality into issues where it has no bearing. It clouds the issue and allows one side to basically say anything as they are supposedly morally superior (evil people don't have emotions and always do the evil thing in every instance, so who cares what else you say about them because their evil so it doesn't matter if what you say is actually true or not). There's a reason why it's a popular card to play with "news" programs and their talking heads.
Teekay wrote:But the collectors are building and displaying them. The scalpers sort of just "have" them until they sell them for profit. There is a big difference.

So what if I buy them and build them, all the while knowing I will sell them for profit later? Where does that figure into your view?
Teekay wrote:These people who want to buy sets at extreme price, can do so if they wish. They are not wrong to lose their own money. If they want to do that, it is their decision. If you buy to sell to them, try the formula above, plus $5 for your inconvience.

The problem with your formula is that I would have absolutely no reason to use it. I have already outlined how it would actually cost me money. It would cost me money to sell to someone who didn't bother to try to get them when they were everywhere. While very noble, it only encourages people to not bother getting them when they are on shelves. Which in turn encourages more scalping because there is an even larger market, and it possibly helps kill the line because people don't bother to buy them at the stores. Both long shots I admit, but long shot doesn't mean impossible. So, are you presently using that plan to resell to people?
Teekay wrote:Well, from his description, he just wanted to get rid of them. But he wanted to get his MSRP back. So he just took whatever profit people were willing to pay.

Call me cynical, but I doubt it was as noble as it sounds. I would guess (yes, it is just a guess) that to him there was no real gamble. It would be like standing in the absolute middle of nowhere and betting that a car won't hit you. Sure, it could happen, but the odds say it is very, very unlikely. So, he had minimal risk and he got away with selling them with a lower seller fee. Again, call me cynical, but I am sure these things crossed his mind. Also, why is it you seem to believe the claims of one guy on ebay yet you seriously question a lot of things any seller on here is saying?
Teekay wrote:Simple. The "reseller" insists that you buy their merchandise at their price or not at all. This eBay guy was just letting people be as crazy as they wanted.

Wal Mart (and TLG for that matter) usually insist I pay a specific price. In fact, there are far fewer price drifferences between TLG and the regular stores than there are between Ebay sellers. What's the real difference? Sellers have the right to ask whatever price they want (and people obviously don't have to pay it if they don't want the item that badly). If they couldn't, there would be no incentive to try to sell anything.
Teekay wrote:No, he is letting people pay however much he wants. He, in his nobility, is willing to take the risk that no one will bid and he'll end up selling it for 99 cents.

Is it a risk, sure. But more often than not it's like betting the sun will rise tomorrow. Sure, it might not (and if it doesn't, we'll likely all be dead so you won't have to pay up), but the odds are in your favor. I'm not saying absolutely he did that (I don't know the guy or what he did). What I am saying is that it is entirely within the realm of possibility. More importantly, given the vigor with which some people have contested the basics of our argument, I would think they would be tearing this guy's potentially immoral practices apart.
Teekay wrote:I've said this before and I'll say it again. Lego and the stock market are completely different things. A great deal of our economy is based off of the change in stock prices. Maybe someone buys your stock for the going price, which is higher than you bought it for. Then a year from now, the buyer sells it at even more than they bought it for. They are clearly not feeling ripped off. If you buy Lego on eBay for $30 and you get it and it has 90 pieces, you will feel ripped off. Stocks are meant to be sold. Lego is not. Stocks are a gamble. You buy them, hoping their prices will increase.

Investing is investing no matter how you slice it. You can say the two are different all you want, but that won't make it something that is reasonable to believe. What is the real difference? You buy both with the idea that their value will increase and you can sell them for more than you payed for them down the road. The person you sell to may only be interested in the dividends or may genuinely like the company and want to support them. The person you sell LEGO to may be wishing to take advantage of benefit of the actual stock (in this case, the set itself) or maybe he believes it will continue to increase in value, or both. There are few differences and none of any real consequence. If it helps, consider them commodities and not stocks since commodities actually have an eventual use and aren't just pieces of paper.

As for your example, if they feel ripped off then why did they buy it? I fall back on my point of buyers needing to know their product. If you feel ripped off after buying something like that, there is only one person to blame.
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Re: A digression on Scalping...

Postby tamuhockey » Mon Mar 09, 2009 10:08 pm

thepatient wrote:
darth jason wrote:Do you have many sales in the U.S. or are most of your customers overseas?
Do you have to have a business liscence and resale number?
Do you charge sales tax on an item that you've already paid sale taxes on?
Does the money you make count as income and you have to claim it?
Can you go into a store like Target and buy sets with a resale number and not pay tax until the final sale that you make?


To answer your questions:

"D0 you have many sales in the U.S. or are most of your customers overseas?" - I get sales from all over the world - and I would say that they are split about 60/40, with 60% being sales to US customers, and 40% spread out amongst the rest of the globe. International orders tend to be for larger dollar amounts (to make shipping more economical) on average.

"Do you have to have a business liscence and resale number?" - Depends on your state and county requirements. Where I live, you do not have to have a business license or resale number. You can run things as a DBA, your can incorporate yourself, or you can just run things as if it wasn't a business, but a side hobby. Important thing is just to follow the laws in your area, and make sure to keep accurate documenation and pay all required taxes to their respective entities.

"Do you charge sales tax on an item that you've already paid sale taxes on?" - Again, will depend on your state and county requirements. I do not charge sales tax, except on items sold to people living in my state. Said tax has to be reported and paid. While yes - it means your local tax collector gets paid twice on the same item - its alot less of a headache. If you keep all your receipts showing the sales tax you already paid - you can file for a refund, to recoup it back, but it is timeconsuming. Just make sure to keep accurate documentation, should the tax guys want to know exactly where every penny is from.

"Does the money you make count as income and you have to claim it?" - Yes, if you are doing it as a for-profit venture, it needs to be reported as income. Again - only the difference between what you paid for it originally, and what it sold for, same rules as with stocks/bonds. You can handle this a number of ways, and usually either a Schedule C, or just declaring it as "other income" when filing your taxes, is sufficient. Again - just make sure to keep accurate records in case Uncle Sam has questions later.

"Can you go into a store like Target and buy sets with a resale number and not pay tax until the final sale that you make?" - This one, I'm not sure of, as I've never tried. I would assume though, that if they let you purchase other things under a "resale" clause, that LEGO would qualify as well - but that requires setting up an actual DBA, and your end-of-year, and quarterly tax documentation will be more extensive, than if just a "side-venture."

Another big thing is insurance - most resellers forget about it, but insuring your inventory is a huge must. If you are keeping 5 or 6 figures (or more) worth of LEGO at your house, or in a small rental space/warehouse, make sure you have insurance on it.
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Re: A digression on Scalping...

Postby Puddleglum » Tue Mar 10, 2009 6:47 am

Tyrant pretty much hit all the main points in responding to Teekay, but here are a few more thoughts of mine.

Teekay wrote:Try, MSRP + tax (if applicable). If you bought it on sale, it's your own discretion.

Well, basically, gain a few bucks for your time, but don't scalp anyone. Basically "People helping other people." Kinda like our own BST. If you want, do what the guy I described did on eBay.

Whenever you try to put a fixed price (MSRP + change) on a limited commodity (OOP LEGO sets), you get shortages. Imagine if right now, all 13 of the MISB UCS X-Wings on Bricklink were changed to MSRP + $10, and that this was always going to be the price for any further listings of this set - they would instantly sell out. No big deal, right? Tweleve collectors are happy with their new sets, and hard luck for the rest of us. The problem is, the other collectors still want to buy the set, and it is going to be *very* difficult. They will have to waste time every day constantly checking ebay and bricklink in hopes of catching somethign as soon as it is listed. Which is worse, forcing all the collectors to waste hours and hours of time trying to get lucky and be the first to buy a set when it's listed, or just setting a price and letting those who are willing to pay, pay?

Teekay wrote:But the collectors are building and displaying them. The scalpers sort of just "have" them until they sell them for profit.

So?

Teekay wrote:
ThinkingImpared wrote:If it wasn't his fault that people bought at inflated prices, how is it a reseller's fault that people buy at inflated prices? It seems to me you are contradicting your previous argument.


Simple. The "reseller" insists that you buy their merchandise at their price or not at all. This eBay guy was just letting people be as crazy as they wanted.


Simple. The "buyer" insists that you sell the merchandise at their price, or they will not buy at all. A purchase and sale is 100% voluntary by both the buyer and the seller. The buyer does not pay more than he is willing to pay, the seller does not sell for less than she is willing to sell. When a seller puts up someting on auction, as Tyrant said, yes there is a risk of a low final price, but really she is saying that she is okay with selling for around what similar auctions are ending at. Further, a collector who is thinking of parting with one of her prized sets has every right to say "I just can't bear to let this go for less than $200" - Why? Because that is what the set is worth to her.

Teekay wrote: Stocks are meant to be sold. Lego is not.

. . . because you say so?

Teekay wrote:One of the funniest things about this thread is all the synonyms for the word "scalpers" people have come up with.

Well, it seems to me that folks are desparately clinging to the word "scalper" because of it's negative connotations, when there are other words that just as accurately describe what is going on. I know this has already been beaten to death, but my dictionary says to scalp is to "buy and sell so as to make a quick profit". If someone buys a set with intentions of reselling years later, speculating or investing are much more appropriate terms.
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Re: A digression on Scalping...

Postby thepatient » Tue Mar 10, 2009 12:27 pm

Teekay wrote:
I've said this before and I'll say it again. Lego and the stock market are completely different things. A great deal of our economy is based off of the change in stock prices. Maybe someone buys your stock for the going price, which is higher than you bought it for. Then a year from now, the buyer sells it at even more than they bought it for. They are clearly not feeling ripped off. If you buy Lego on eBay for $30 and you get it and it has 90 pieces, you will feel ripped off. Stocks are meant to be sold. Lego is not. Stocks are a gamble. You buy them, hoping their prices will increase.


The idea behind the Stock Market and the reselling of LEGO are fundamentaly the same principle, just two different means to the same end. With the economy right now I would say that if you played your cards right, the reselling of LEGO is the better way to go. My wife's 401k took a huge dump lately, I'm sure the LEGO is a bit more recession proof.

Tamuhockey you've been very helpful and informative in your answers to my questions. I'm really thinking about trying this type of business. Even though you didn't brag, with the numbers you're talking, you have the right to. When you mention insurance- your homeowner's insurance doesn't cover that? Do you insure it with a different policy?


This is the most informative thread (excluding the toy fair info) since the new site started- very interesting to read.
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Re: A digression on Scalping...

Postby LEGOscum » Tue Mar 10, 2009 2:31 pm

Puddleglum wrote:They will have to waste time every day constantly checking ebay and bricklink in hopes of catching somethign as soon as it is listed.


Or they could just use alerts. Both eBay and Bricklink have these tools.
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Re: A digression on Scalping...

Postby tamuhockey » Tue Mar 10, 2009 3:06 pm

thepatient wrote:Tamuhockey you've been very helpful and informative in your answers to my questions. I'm really thinking about trying this type of business. Even though you didn't brag, with the numbers you're talking, you have the right to. When you mention insurance- your homeowner's insurance doesn't cover that? Do you insure it with a different policy?


Happy to help - on insurance - it will also unfortunantly depend on the laws in your state/county, as well as your insurance carrier. Most homeowner policies should cover at least some of your lego that is onsite. Alot of carriers though, will want you to have a seperate rider to ensure a collection that is large (say over $2000-$5000 worth) and they have seperate collectors insurance that you can purchase to cover that, if its purely part of your personal collection. If you are a small operation, that may be sufficient. Depending on your state though - homeowners insurance may not cover "business inventory/equipment" that is stored at your primary residence, and you would actually need 3rd party business insurance to ensure it against loss/theft/damage. In my area - this is the case. I don't think there's a magic cut-off for when it becomes a business, versus a side job, but insurance companies will use anything they can to get out of paying a claim - so again - just keep good documenation, and make sure that if you carrier won't ensure business inventory stored at your house, that you have a seperate rider/policy to cover it. Doing so - may also affect your homeowners policy (some carriers charge you more or less if you run a business out of your home) - so it may be cheaper, all things considered, to rent one of those climate controlled storage units, and pay the property manager for insurance on what you have stored there. Really all comes down to how much lego you are sitting on. I know several BL sellers that have at any one time, upwards of $100,000 worth of sets/parts in their "shop," and there are even a couple that are likely closer to the 7-8 figure mark.
Last edited by tamuhockey on Wed Mar 11, 2009 12:06 am, edited 2 times in total.
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Re: A digression on Scalping...

Postby ThinkingImpaired » Tue Mar 10, 2009 5:15 pm

LEGOscum wrote:
Puddleglum wrote:They will have to waste time every day constantly checking ebay and bricklink in hopes of catching somethign as soon as it is listed.


Or they could just use alerts. Both eBay and Bricklink have these tools.


His point was that no matter what you do, it is impossible for enough people to get their hands on the sets if you make the sellers sell at retail price. There are not enough...using alerts does not help; it only increases the speed of someone spotting a new auction but the result is the same either way.
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Re: A digression on Scalping...

Postby Teekay » Tue Mar 10, 2009 5:59 pm

Okay, I don't have much time, so instead of quoting everyone's replies, I'll just paraphrase and respond:

Okay, Tyrant and Puddleglum responded to my formula. Okay, maybe I was a little off there. I was tired (the only time I have to write these is at night) and I forgot about gas and eBay rates. Try my new formula:

MSRP + tax (if applicable) + $5 (for gas) (if applicable) + eBay seller fee (if applicable) + $5 (for any inconvienice)

Tyrant wrote:There is no need to lie. These things practically sell themselves if you do it right.


I'm glad we agree on this. Lying is wrong and unnecessary.

On scalpers just having them, rather than building and displaying sets, just kinda having them, the general response was "so what?" My reply to that is:

The scalper has the MISB Hoth Rebel Base for no other purpose than to sell it. The collector who has 7666 Hoth Rebel Base is actually using it for a purpose. They built it. That killed some time and was probably fun. They displayed it. It looks really nice, and I bet they got some complements for their collection when they had friends over. They swooshed the speeder. The had some fun, and that is a stress-relieving activity. (I know, swooshing LEGO ships. It sounds silly. But it works for me.) The scalper didn't put them to any use for the year they had them. Poor LEGO. It was probably so sad.

To replies to quantity:

Tyrant says he has 20 of a BP. And also 12 of Tower Raid. Side point: TWELVE of Tower Raid! That's a $30 set. You clearly have a lot of spare money for LEGO.

On the eBay seller:

Tyrant wrote:Call me cynical, but I doubt it was as noble as it sounds. I would guess (yes, it is just a guess) that to him there was no real gamble. It would be like standing in the absolute middle of nowhere and betting that a car won't hit you. Sure, it could happen, but the odds say it is very, very unlikely. So, he had minimal risk and he got away with selling them with a lower seller fee. Again, call me cynical, but I am sure these things crossed his mind. Also, why is it you seem to believe the claims of one guy on ebay yet you seriously question a lot of things any seller on here is saying?


No, actually, one, I believe didn't sell, or at least had no bids when I last checked. (a few minutes before it ended) It was the Desert Skiff set. So the guy actually didn't sell one (or at least, if someone made a last second bid, sold it at 99 cents). That was a risk that didn't pay off.

On LEGO and the stock market, the hot button topic here, seemingly, so I'll quote back the posts for accuracy:

Tyrant wrote:Investing is investing no matter how you slice it. You can say the two are different all you want, but that won't make it something that is reasonable to believe. What is the real difference? You buy both with the idea that their value will increase and you can sell them for more than you payed for them down the road. The person you sell to may only be interested in the dividends or may genuinely like the company and want to support them. The person you sell LEGO to may be wishing to take advantage of benefit of the actual stock (in this case, the set itself) or maybe he believes it will continue to increase in value, or both. There are few differences and none of any real consequence. If it helps, consider them commodities and not stocks since commodities actually have an eventual use and aren't just pieces of paper.


thepatient wrote:The idea behind the Stock Market and the reselling of LEGO are fundamentaly the same principle, just two different means to the same end. With the economy right now I would say that if you played your cards right, the reselling of LEGO is the better way to go. My wife's 401k took a huge dump lately, I'm sure the LEGO is a bit more recession proof.


LEGO being resold is not the same thing as the stock market. For one thing, take the buyer.
The person buying LEGO is, 9 times out of 10, a collector who will open and display the set.
The person buying the stock, 10 times out of 10, is going to sell the stock again.

Puddleglum wrote:Simple. The "buyer" insists that you sell the merchandise at their price, or they will not buy at all. A purchase and sale is 100% voluntary by both the buyer and the seller. The buyer does not pay more than he is willing to pay, the seller does not sell for less than she is willing to sell. When a seller puts up someting on auction, as Tyrant said, yes there is a risk of a low final price, but really she is saying that she is okay with selling for around what similar auctions are ending at. Further, a collector who is thinking of parting with one of her prized sets has every right to say "I just can't bear to let this go for less than $200" - Why? Because that is what the set is worth to her.


Simple. The buyer is suggesting the price at which they feel willing to buy the item. The seller, if they are not happy with that price, or the gamble of not getting their price, would have started it higher. When the buyer chooses the price, everyone is happy.

Also:

Puddleglum wrote:. . . because you say so?


No, because the inventor of LEGO says so. The person who created LEGO intended it as a child's toy and stuff for older builders. The person who invented the stock market intended it for trade and resale.

Sorry my post is so messy, but my dad is bugging me to get off.

P.S: tamuhockey, I think you misquoted thepatient's post. I didn't say that, he did.

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Re: A digression on Scalping...

Postby Tyrant » Tue Mar 10, 2009 7:18 pm

Teekay wrote: To replies to quantity:

Tyrant says he has 20 of a BP. And also 12 of Tower Raid. Side point: TWELVE of Tower Raid! That's a $30 set. You clearly have a lot of spare money for LEGO.

I got several of them on sale. I believe it was Meijer that had them on sale ($20 if I recall) and I bought 5 or 6 at that price. I bought 1 just after XMas on clearance at Wal Mart. I got 3 for the price of two at KMart at some point. One of these days I plan on using the parts (plus the parts of 4 dwarven mines and numerous other Castle sets) to make a decet sized Castle. I'm just not coming up with a design I like so I haven't done much beyond making a few small castles to get some ideas for the larger design. This is the upside of scalping, I stay on top of the prices of most sets. The BP on the other hand were mostly MSRP. A few were buy 2 get 1, but not many.
Teekay wrote:On LEGO and the stock market, the hot button topic here, seemingly, so I'll quote back the posts for accuracy:
LEGO being resold is not the same thing as the stock market. For one thing, take the buyer.
The person buying LEGO is, 9 times out of 10, a collector who will open and display the set.
The person buying the stock, 10 times out of 10, is going to sell the stock again.

Like I said, the better comparison may be commodities. Things such as oil and corn. They too have an eventual end use, but the same general rules (buy low sell high) still apply (unless you're shorting, but that's a whole other matter).
Teekay wrote:Simple. The buyer is suggesting the price at which they feel willing to buy the item. The seller, if they are not happy with that price, or the gamble of not getting their price, would have started it higher. When the buyer chooses the price, everyone is happy.

But as it stands the buyer doesn't choose the price in the store. There is their price or you don't buy it. The only real difference is that the reseller is asking a higher price than the store originally asked.
Teekay wrote:No, because the inventor of LEGO says so. The person who created LEGO intended it as a child's toy and stuff for older builders. The person who invented the stock market intended it for trade and resale.

The inventors intentions aren't relevant. The inventor of dynamite thought it would save lives (it is essentially a stable form of Nitro Glycerin, which is highly unstable). His invention has been used to end many lives despite his intentions. Fun history fact, his reaction to seeing it's other use (to end lives) was to create the Nobel prize (with the top award going to the peace prize). The Wright brothers likely wouldn't like to see their invention leading to the F22 Raptor or the stealth bomber. I'm assuming on that one as I don't know about their personal point of view. I believe at the time he came up with it, Einstein didn't know what one of the end prodcuts of his theory would be (nuclear weapons). The point is, no matter how an inventor intends something be used, once it's out there people can and will use it any way they see fit.
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Re: A digression on Scalping...

Postby Voice of Reason » Tue Mar 10, 2009 8:22 pm

All opinions aside, the simple fact is that it is not a crime to buy and resell LEGO. Period. Like it or not. This conversation can continously go around and around, but I don't think anyone is going to change their hard-set views. And that's okay!

I keep checking this thread every few days expecting it to be locked up. To my pleasant surprise, the new FBTB has allowed it to exist and I think that is a huge improvement to the site (on principle). My main point for chiming in tonight was to just say thanks to FBTB for letting a discussion continue without stepping in with a lock. I'm sure the temptation has been there.
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Re: A digression on Scalping...

Postby The Brain » Tue Mar 10, 2009 10:11 pm

Ah, Voice of Reason, now that I'm out of the debating and aruging process, I completely agree with you! If this thread was on the old forums, it would have been locked by no later than page 4. It is fun to see such a raging debate go on--even if I'm tired of it. :D

I think this thread should remain unlocked, but I think it's unnecessary to debate this any further--unless I see some completely new members giving their own opinions and solutions, I'm not coming back to this thread. We've seen what everyone like me, Tyrany, Teekay, ThinkingImpaired, thepatient and others feel: anyone else going to give us their spin on this thread?
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Re: A digression on Scalping...

Postby meeotch » Wed Mar 11, 2009 12:32 am

I have to say, I've enjoyed this thread. I don't know what it was like on the old forum, but all I have to compare this to is the other forum I frequent. Over there (where there are pretty much no rules) this would have digressed into a flame war by page 2. I think everyone here's been civil, and while it's plain to see that not everyone will ever agree 100% on this, I certainly feel better about seeing the other side of the argument. Point is, it's a gray area, and it comes down to how your gut feels about it.
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Re: A digression on Scalping...

Postby Solo » Wed Mar 11, 2009 12:58 am

I know I stepped out of this conversation, but I wanted to mention I haven't stopped reading it. I said what I felt needed to be said and I've got nothing more to add, but it's pretty obvious others have plenty more to say. No one has given any of the staff reason to lock it - and until that happens it'll remain open. You guys are acting like the staff is a lot more laid back... when in reality I think the members (at least the ones conversing in here) are showing their maturity. No one is getting personal or belligerent. Everyone is being pretty clear with their opinions.

It's a lively discussion. We want to see more lively discussions.

Go ahead and see what else we won't lock. ;)
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Re: A digression on Scalping...

Postby darth jason » Wed Mar 11, 2009 9:11 am

I think this has been a great topic. Lots of people have some very strong opinions and its fun to read them. Its even better to participate and give yours. Ive been jumping in and out of this one for a while and i still think what most people have to say is relevent and interesting to me. I like that fact that these are going on for a while. Its also been really informative, i know ive been pretty fortunate to get some good deals on Lego's and its been really informative to find out how others score their lego sets.
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Re: A digression on Scalping...

Postby Joxer the Mighty » Wed Mar 11, 2009 5:36 pm

darth jason wrote:
Inzane wrote:
Joxer the Mighty wrote:I just bought 100 Twilights (49.99) on shop@home.


:lol: That POS is not going to fly off shelves at even half price. (I know I'm still not tempted to buy it.)


So now Joxer has made a speculative risk. Not scalping i see lego sets all the time, not just once or twice in my life time like the Plant/Page tour. I prefer to call it what it is, speculation. A pretty good one at that, because it's usually some of the more comercially unpopular sets that end up worth the most money on the toy aftermarket. but he could loose his shirt, Ive seen a lot of these up for auction on ebay and the closing prices are pretty close to this $50 sale price. So is it ok if somone bought any number of these at george lucas's price of 89.00 each to turn a profit? 10 bucks under MSRP seems to be right in there with what some people on the con side seem to think as acceptable profit...what ever that is.

So my question is this; Is it ok if Joxer loses his behind on those twilight's that he found, and why?


Guys, I was kidding about buying 100 Twilights, I only bought one. I thought when I referenced a future sale of $51 I was saying that $1 profit per set would convey my sarcasm. Do I think it will go up in value, of course. We buy/play/collect a product that has proven value, especally long-term, but when it comes down to it, I buy because I like Legos. And I'm pretty sure everyone posting in this thread feels the same way. I have been a little surprised about how some people feel about "scalping". These sets are available to everyone, they aren't exclusives (any other Gentle Giant collectors will understand) where you don't know if you will be able to acquire it w/o paying secondary market inflated prices. I guess I always equated scalping more with lack of availability.
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Re: A digression on Scalping...

Postby Teekay » Wed Mar 11, 2009 6:28 pm

Tyrant wrote:I got several of them on sale. I believe it was Meijer that had them on sale ($20 if I recall) and I bought 5 or 6 at that price. I bought 1 just after XMas on clearance at Wal Mart. I got 3 for the price of two at KMart at some point. One of these days I plan on using the parts (plus the parts of 4 dwarven mines and numerous other Castle sets) to make a decet sized Castle. I'm just not coming up with a design I like so I haven't done much beyond making a few small castles to get some ideas for the larger design. This is the upside of scalping, I stay on top of the prices of most sets. The BP on the other hand were mostly MSRP. A few were buy 2 get 1, but not many.


Cool. That's still like five times more LEGO money than I have.

Tyrant wrote:Like I said, the better comparison may be commodities. Things such as oil and corn. They too have an eventual end use, but the same general rules (buy low sell high) still apply (unless you're shorting, but that's a whole other matter).


Alright, that arguement makes a little more sense, but still, oil is generally not bought at then resold at twice the original price on eBay.

Tyrant wrote:But as it stands the buyer doesn't choose the price in the store. There is their price or you don't buy it. The only real difference is that the reseller is asking a higher price than the store originally asked.


But actually, to a certain extent, the buyer does choose the price. Holding off to a sale, for example is a form of choosing your price. Also, collecting coupons allows you to choose your price. So in a store, you can choose the price to a certain extent.

Tyrant wrote:The inventors intentions aren't relevant. The inventor of dynamite thought it would save lives (it is essentially a stable form of Nitro Glycerin, which is highly unstable). His invention has been used to end many lives despite his intentions. Fun history fact, his reaction to seeing it's other use (to end lives) was to create the Nobel prize (with the top award going to the peace prize). The Wright brothers likely wouldn't like to see their invention leading to the F22 Raptor or the stealth bomber. I'm assuming on that one as I don't know about their personal point of view. I believe at the time he came up with it, Einstein didn't know what one of the end prodcuts of his theory would be (nuclear weapons). The point is, no matter how an inventor intends something be used, once it's out there people can and will use it any way they see fit.


However, although those are all good points, LEGO and the stock market are what we're talking about here.
Let's go down the line, shall we?
The inventor of the stock market intended stocks to be sold.
The businesses who sell their stocks intend stocks to be sold.
The stockbrokers intend the stocks to be sold.
The buyers of the stocks intend the stocks to be sold.

Now, for LEGO:
The inventor of LEGO intended it as a child's toy.
The current set designers and marketing intend it is a child's toy. (We collectors grimmace at those ads and random features, knowing they are childish, right?)
The retail stores intend children to buy LEGO.
Most LEGO buyers are children.
Most of the rest are adult or teen collectors.
Only a very small percent intend for it to be resold.

That's clearly an overwhelming majority that DON'T intend LEGO to be resold.

Hey, by the way, this has been fun thus far. I'd like to thank the staff for giving this a chance. Also, Tyrant, Puddleglum, ThinkingImpared, and others, have put up some great arguements. A lot of their points I have struggled in responding to. We may have different opinions, but you all are great.

And I'm not saying let this arguement end. Let it come.

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Re: A digression on Scalping...

Postby darth jason » Thu Mar 12, 2009 9:29 am

Oh Joxer you joker.. That makes sense you were joking around. Since the topic was kinda serious and since sarcasm really doesnt translate in a forum unless its a good play on words and really good use of punctuation. no one can see your infletion,tone, body language, what have you. I thought a dollar or two profit sounded kinda lame but who am i to say what is acceptable profit to someone since its all realtive... but that was kinda the point to man, its your discretion, its you money, you do what you want. Whether you buy 1 flying brick or one hundered it dosent matter and no one can really tell you different, hey they aint paying your bills ergo you can do with them what you please.

Its Good to lighten things up Im gonna watch out for you next time.
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