A digression on Scalping...

[ufjason]

Check out this wiki on scalping I found. Not only does it define it well, there are key points you should take note of. With the exception of the castle advent calendar, there has been no limited supply of any Lego set in retail or online stores in the life of a particular set.

linkified

[Solo]

You see, that definition in the link is the vilified illusion I addressed in my first post. It may hold true for Transformers and action figure collecting since equal case distribution isn't a guaranteed in all areas - but LEGO is a whole different market in comparison (except the rare cases like the Advent calendar as you said). LEGO Scalpers don't rely on any demand generated by buying up sets so no one can get them - they wait for the demand to hit once the sets are sold out.

Pete: go back four pages, I'm just repeating what I said initially. Scalping is an investment with hopes it will be profitable in time. It is targeting specific items by following the interest of the community, and if you want to make any real money you will have to buy bulk. It's a simplification of the overall process, but it's absolutely true.

Even if you disagree with the definition you can at least agree that what I'm describing is clearly taking advantage of the system and collectors to make a profit.

[onions]

that's funny, that wiki* article you linked to links to this:

http://www.alteredstatesmag.com/mar2000 ... ping.shtml

which quotes Greg Hyland.

[Solo]

Sidenote: I can't help but think of this every time I go back to this thread, and on that, I think I'm done. It's getting boring and redundant now so I'll leave you with this. Whether you want to call it scalping or not, buying things at retail and selling them to collectors for a profit is selfish. You're well within your rights to do it and it provides people with an avenue to pick up things they otherwise would be out of luck on... but at the same time you are taking advantage of people for the sole purpose of money. It's a practice I have mixed feelings on, and I openly admit I've done this in the past. I just don't have any delusions about it and it vexes me reading responses trying to justify the absurdly high prices some of these things fetch when it's all so arbitrarily established.

[deco_droid]

unless you work for lego, you can't tell me that the price of 10195 is overpriced. that observation is simply an opinion and at best an educated guess until we hear it from someone on the inside.

well, compared to the rest of the line, yes, it is overpriced -- it seems rather obvious. no, i don't work for lego, but are you implying there is something about the set that makes it worth more, besides the fact that it is cool and lego thinks they can get more for it? if they're automatically putting chrome vaders in each one, for instance, it might be worth it!

I'm totally going off here, but how many of you remember the big star wars day at toys r us last summer to celebrate the 30 yr anniversary? i was at san diego comic con that day and we went to the local TRU. once we were let inside, one guy took his cart and loaded up on 7666, took every single set he could find. 10 minutes later, i see a little boy and his grandma, no joke, looking through the lego stuff. I asked what they were looking for and they said 7666. i told them to ask one of the workers for more and told them that there are no more on the shelf (since they wouldn't restock until there was room). a few seconds later, the kid happy as a clam walked up to the cashier. the mom thanked me cause i had the foresight to know how those stupid midnight releases worked. had i not been there, he would have gone home disappointed. just because there were other means of getting it, it wouldn't have been as much fun for that boy. slurping up all the available stock can make you a rich man for sure, but at the cost of affecting others negatively.

i agree with you here -- that guy shouldn't have taken every last 7666. but i also have a scalper story....

i had several sets for sale on ebay last december. as it happens, i recieved a best offer bid on some batman lego, and decided to take it. it was probably $150 more than i paid for it. evil me, right? well, i got a message from the winning bidder later -- it was a mother who went on and on about how happy her son would be this christmas because of this one set. point is, scalpers are out there making kids happy too, you probably just don't hear about it as often.

[ufjason]

The key word mentioned is collectors. Collectors are not typical buyers. They are much more engaged emotionally to the items. They don't buy out of need but out of want/desire. Collectors create demand for items, Lego supplies that demand. Sometimes a manufacturer can limit production but I can't think of anything I wasn't able to find in retail, Lego or otherwise. It happens that Lego sets retire and anytime you're looking for something that is no longer freely available, price will go up because collectors are competing for a small supply still available. It's the collectors that drive up prices. If I set up an auction, I can't control the outcome when I start the price at $.99. I have a store so everything is fixed price. My pricing research involves looking at the average item prices looking at the highs and lows and factoring in the high quality I provide the market place. I sell at the high end of completed auctions as I'm in no hurry to liquidate and maintain steady sales.

For those who've never seen it, here's a link to my basement storage. The pics show the progression and it looks completely different today. I moved a lot of inventory and added a bit over the last few months. I've toyed around with the idea of having a physical store but the overhead would completely negate the benefit.

My operation was small at first, meant to fund my own Lego collecting. It was hard not to increase the scale when acquisition opportunities were so cheap and plentiful. I'm no different from retailers looking for discounted goods to resell in their stores.

Edit: The last post brings up a great point. I can't count the number of compliments I've received from buyers about how happy they were with their purchases. Check out my feedback and the related auctions. I ship very quickly, maintain the quality of my sets and box my items well for shipping.

[meeotch]

I'll give you five bucks for that dino attack set!

[onions]

well, compared to the rest of the line, yes, it is overpriced -- it seems rather obvious. no, i don't work for lego, but are you implying there is something about the set that makes it worth more, besides the fact that it is cool and lego thinks they can get more for it? if they're automatically putting chrome vaders in each one, for instance, it might be worth it!

all i'm implying is that without first hand knowledge of the pricing model (which includes the economics of raw materials, logistcs, supply chain, manufacturing, and overehead) used to determine the price of a set, all we can do is speculate, and last i checked, speculations are not facts. it is your opinion, and many others, that 10195 is overpriced. i'm not disagreeing with you, nor do i think you are right or wrong; the issue i have with your statement is that you are stating it as fact.

and to those of you who say you've gotten accolades and kudos and notes of gratitude, you are basically justifying your scalping behavior by claiming you are providing a service. besides, that's what people do when they are desperate and are finally able to get the thing they've been searching for: feel relief; the "thanks" are just expressions of that relief. it's meaningless to the act, as is your ebay feedback profile.

[speaknspell]

There are many reasons why LEGO doesn't reissue old sets, and the one most often stated by LEGO is to preserve market value. I also used this rational to explain why LEGO does profit from the secondary market.

Wait, who from LEGO told you that? If it was me then I screwed up. We generally don't reissue sets because the retailers want something new and we'd prefer to come out with a new product now instead of just rehashing an old one. Doesn't really have anything to do with preserving secondary market values...at all. If we wanted to preserve secondary market values we never would have released a Storm Trooper battle pack or more sets with Royal guards. Those guys used to fetch a high margin on bricklink but they're much more readily available now so that market goes down.

While the LEGO Group cares about the secondary market, our set choices and part choices aren't driven by any desire to keep any of the older stuff up on eBay, its to make new cool sets. Again if I gave any impression to your thought above then I severly miscommunicated. I'm still curious who it is doing the stating in that...statement.

Steve

[onions]

don't worry steve, so many arguments and points in this thread are so wrought with assumptions, you're likely to leave with more bums on your back than when you came in.

[Teekay]

I'm totally going off here, but how many of you remember the big star wars day at toys r us last summer to celebrate the 30 yr anniversary? i was at san diego comic con that day and we went to the local TRU. once we were let inside, one guy took his cart and loaded up on 7666, took every single set he could find. 10 minutes later, i see a little boy and his grandma, no joke, looking through the lego stuff. I asked what they were looking for and they said 7666. i told them to ask one of the workers for more and told them that there are no more on the shelf (since they wouldn't restock until there was room). a few seconds later, the kid happy as a clam walked up to the cashier. the mom thanked me cause i had the foresight to know how those stupid midnight releases worked. had i not been there, he would have gone home disappointed. just because there were other means of getting it, it wouldn't have been as much fun for that boy. slurping up all the available stock can make you a rich man for sure, but at the cost of affecting others negatively.

Aw, that would have been so bad if the kid hadn't gotten that because one guy wanted to make some money. Good thing Ace was there to save the day!

I posted way back in the beginning of this thread, but it has escalated into a big conversation. I'll just add my own two cents again, and this time more clearly:

I think this is wrong:

• Buying multiples of a set just to sell them all off later.
• Lying about a set to increase its price. (I've seen this all the time on eBay. "Naboo Swamp. Only set ever with Qui-Gon. Goes for a hundred on Bricklink. Only $40." Okay, I realize I'm exaggerating, but I've seen things almost this bad)
• Lying about the MSRP that you bought it for to make someone think that they are paying a fair price.
• Saying that MISB is worth $10 to $20 more than complete, good condition, instructions, box.

I think this is not wrong:

• Buying multiples for your collection, parts, additional minifigs, etc.
• Selling a set just to cover the cost that you payed, plus maybe 5-10 dollars more for age.

Also, I am quite wary of people selling MISB on Bricklink for increasingly inflated prices. If it is close to MSRP, okay. However, if someone is selling an MISB set for a huge price, I can safely assume that they are a scalper of the kind that almost took that boy's chance for 7666 away, and I don't want to associate with them. However, if it is out of box, I can assume that it was owned by a either:
a) A kid that grew out of Lego (gasp) who is selling his collection to make a little money for college, a car, etc.
b) A collector who is either not into Lego anymore or must sell it to afford food, mortgage, etc.

~Sam (Teekay)

[speaknspell]

lol fair enough. you guys are all CRAZY! especially you Don.

Steve

[Flynn]

My only experience with scalpers was when I saw 3 Atari 2600s at Goodwill. I got really worked up about them, and I came on half-price day to buy one. All three of them had been bought that morning by the same person. Now, there's a chance it wasn't a scalper, but that was the first thing that popped into my head.

[Solo]

lol fair enough. you guys are all CRAZY! especially you Don.

Steve

[Tyrant]

I should probably preface this. In case none of you could guess (or in case any of you actually care), I live in a state where ticket scalping is legal. If I had the time and money to get involved, I would have no moral problem doing so. If the distributors of a product can't see an obvious flaw in their distribution method that has been known for decades, then they are either too stupid to see it or they don't care. In either case, I see no problem in profiting from it. I have sold event tickets before. I sold them for more than I paid for them. They were to sporting events. I sold them right outside for roughly what the professional scalpers were charging. I haven't ever felt bad about it either. I will also say that I believe people that seem to be dead set against scalping are on the naive side. We live in a culture that prizes wealth above almost all else. Is it really so hard to believe people will do what they can to attain it? As several keep asking, what is wrong with making money? I make money working at my job, is that evil? The company I work for presumably makes money, is that evil? We pour concrete. We charge more than it actually costs to do it. Where is the faux anger for that? I see plenty of people trying to sound like they are taking some moral high road when there is none to take. This moral code is a total joke compared to the rest of society. Some are really trying to make it sound immoral to buy out the supply of a luxory item. Really? It makes me immoral because you can't spend your disposable income at Wal Mart and have to order online instead? I don't know how some of you have disposable income, what with not liking profit for the individual (which I am going to assume everyone here is) and being insanely oversensitive to the wants (not even close to needs, just wants) of your fellow man. Aren't there causes more worthy than LEGO you should be giving your money to?

I think the real problem here is that it is easy to do this. No one seems to have a problem with people making a profit all the way down the chain. It's just that last step. That last regular guy making a buck. They see how easily he is making money. And they envy him. Or feel bad for themselves. They see how easy it can be to make money on the side, and they don't do it and on some level they feel bad about it. So they go and create this whole fantasy of some code of chivalry reborn in the modern era to make themselves not feel bad. Naturally, scalpers must be evil incarnate for this view to work on any level, so they act like they are. Once it reaches this point for them, they will never even consider scalping and their anger just continues. It's like people who hate rich people (on general principle, not when they do something hate worthy). Deep down they want to be them, but they can't so their mind twists it around to the point that they hate them.

I've been following this thread pretty closely and it has been quite interesting and thought-provoking for the most part. It is clear that there are a couple meat-heads here who are not interested in a discussion but merely in asserting their own narrow-minded views. But to those who have contributed to the dialogue, thanks! It's been a good read.

Ah, the age old non directional insult that most anyone can decipher who it truly targets. Oh so clever.

I think maybe what this boils down to is folks' sense of common decency and what is "fair". The act of walking into a single store and purchasing a cartload/clearing the shelves of one or two sets does carry some moral baggage in my opinion.

What moral baggage? If there is 1 left and I buy it, should I really feel guilty because little Timmy might have been just around the corner waiting to buy it? There is no reasonable difference between me buying the last one and me buying all of them (especially when they are replaced regularly and are available all over the place). For the record, if I ever did clear out a store and I saw the hypothetical little Timmy and heard of his wishing he had the set I had a cart full of, I would give him one. When I see parents complain prices are too high, if I know of a place where it is cheaper I tell them. I've even given people coupons I had too many of before. I actually saved those people money and helped their kids get the toys they want all because I pay attention to the best deals and keep up on where to buy. Funny how that oh so horrible practice can actually benefit the people I am supposedly trying to bend over a barrel.

The problem with the argument is that this is where it breaks down. If I buy any sets whatsoever, I am potentially taking one someone else would buy. Now, suppose I actually do want 20+ of a set (it's happened once or twice for me). How am I not being greedy buying that many? That is potentially 20 customers I have wronged by this morality being discussed. But it's apparently okay to be a total glutton as long as the sets are only for you. The moment profit enters into it, it's time to break out pitchforks and torches to storm the (LEGO) castle and kill the monster. Buying huge numbers of sets for yourself (which no one here seems to have a problem with for some reason) is also greed. That is what they call hypocrisy and it's why the argument doesn't work. The ultimate end result of the argument is to give everyone on the planet one of each set to be fair to everyone. Let me know when they announce that policy.

Such a practice does ultimately rob others of the opportunity to own those sets

So does buying any set at all. See how silly that sounds. It's true though. Every set I buy is one less set in circulation and there are presumably fewer sets than people. If robbing others of the opportunity to buy it is the problem, you should stop buying them right now because you are as much a problem as any scalper.

. . . waited around for clearance prices to give others a so-called "fair" shot? It's still wrong because even though those sets may have been around a while, others were probably waiting around for the same moment to purchase those sets because they couldn't afford regular retail prices (imagine a 10-year-old with a $2.00/week allowance. A kid like that is not spending his money elsewhere, but is only saving up for the Republic Gunship, so "don't buy cola for 3 months" is not a valid argument).

Ignoring the obvious attempt to appeal to the bleeding heart using the kid example for a moment, if you are banking on waiting for clearance, you are gambling. When you gamble (and I love to gamble, so I would know) you can't always win. The odds always catch up to you sooner or later. If you really want it, buy it when it's everywhere. If you wait, there is no one to blame but yourself. Now, I understand people have reasons to wait (no money at the time, no time, etc) and I truly do sympathise (I'm not made of money). However, their problem should be with LEGO and their distribution scheme that doesn't leave these items on the market long enough. The scalpers follow demand, they don't create it. I've played the clearance waiting game before and I usually get burned. It happens. I accept it as a risk I have to take and I move on. I don't curse the scalper who bought it. I salute him for having more resolve (or better luck) than me to get it.

My recent personal example would be with the current Castle line. I wanted the Giant Chess set but I had no plans on paying $200 for it. I assumed that like other products of a similar nature released in the past it would drop in price at some point. It looks like I was wrong and they planned on low volume (I assume it was low volume, it might have just sold out regularly). I have been watching the medieva market village to see what it does. I knew I wanted one, probably two or three. After watching the shipping date move farther and farther out I finally broke down and bought one. I had wanted to see one in person before buying more. As it is I am afraid to wait and might go ahead and order more before I even get the first one. My past experiences of waiting for a better deal have taught me that the better deal doesn't always come around so I am taking the initiative on this set that I really want. I am doing that instead of complaining that they apparently can't make them fast enough to fill demand. If we're going to discuss morals, my moral compass tells me complaining is waistful and wrong. Action is productive and right. Do something about it instead of demonizing everyone else. Take personal responsibility. I know that is an almost foreign concept anymore, but it works wonders.

As Don pointed out, if we lived in a utopian environment where everyone only took what they needed (i.e. only bought the sets they wanted, and only bought what they themselves would use), those high-demand items would still be difficult to come by. But the irksome element here is when I've visited 10 different stores within 100 mile radius and can't find what I want, look online and see that Joe Shmo-face has 5 and is selling them for double the retail price, my immediate reaction is that Joe Shmo-face and all of his shmuckity cronies have robbed me of the opportunity to own a set at what I believe is a "fair" price.

Did joe and his cronies also clear out S@H, or was that too much to ask to check that too? Did you check to make sure Joe lives right next door, or is really 5 states away and it was just regular customers who bought them and poor distribution is what is causing your problems? I understand being upset. It's happened to me. The difference is I don't curse the day Joe was born. I figure out what I did wrong and better prepare for next time. I adapt and overcome. Complaining solves nothing in most cases.

Sure, it would be disappointing to know that several other LEGO customers just beat you to the punch, but that (and that alone) could be attributed to a capital market, and I could live with missing a set knowing that those who did get it are at home right now swooshing it around their house with a smile. But it's downright infuriating to know that someone beat you to the punch and stood to gain from it financially. For the record, disappointment and fury are two different emotions. . .

Maybe it's just me (possibly), but why is that the making money factor is what tips all these instances over the line? It really sounds like the whole problem is that people believe it is wrong to make money. That's honestly what I am getting from it. Let me know if I'm wrong because I really do want to better understand this. Like I said, maybe it's me. Maybe I'm a borderline sociopath who doesn't care at all about his fellow man (possible, though improbable). I think I just more easily accept that the world is the way it is and if you want to succeed there are things you have to do (like make money).

Now, as for a possible "solution", I can only offer this:

--> LEGO eliminates the concept of a "limited" set. If upon early release a particular set encounters higher than expected sales and acclaim, produce more of it. Period. If the TLG corporate folk, or LEGO brand store employees, feel bad for the kids who miss sets the solution seems simple to me. Extend the set's production run.

I can see some variation of this being viable. I don't see them eliminating Limited or Exclusive sets. But what they can do is if that set sells enough (some amount to be determined by TLG), they will reissue it a year or two after it was originally available. There has to be lag time built in so the store that originally got it can clear out all of their supply. And so that they can up the price a little (which they will, if for no other reason than it will probably have a lower production run). Or, they over produce the sets beyond the order by some percentage (probably no less than 10% but no more than 25%) and release them 6 months after the store initially carrying them runs out (or they go to clearance). They sell them on their website with some way of limiting them that deters most scalpers (ideas on that one anyone?).

Finally, I'd just like to denounce those who think this practice is "smart". Sure, you can make a fair bit of money on retired LEGO sets, but on average you can only recoup about 5 or 6 times the retail price. There are far more lucrative "investment" opportunities out there, so scalping/investing in something with such a low kick-back doesn't seem very smart to me. . .

First I will mirror the other poster who wants to know what you consider a good return if 500-600% isn't worth messing with? And drug traffickng, arms dealing, and diamond smuggling aren't legitamate businesses. With the current state of the market, I am fairly confident in saying a lot of those "smart" opportunities you are talking about aren't looking so hot right now. Not to mention, they have a far higher entry price to play that game. This one can build exponentially if you play your cards right (and get lucky) and the starting costs are minimal. The risk is also minimal. What I buy to resell will never be worthless. At the very least, I will use it in my own collections if it comes down to it. Other investments can reach truly worthless levels. Denounce all you want, I know which is the smart choice here.

[ThinkingImpaired]

Whether you want to call it scalping or not, buying things at retail and selling them to collectors for a profit is selfish.

Maybe it is selfish. I think buying anything on sale/clearance is selfish to some extant...you're getting an item somebody else won't be able to get, whether it's 1 or 100...I think parking in a spot close to a store is selfish. I think picking up a coin from the street is selfish. You could've let somebody else get whatever you did. Many things are selfish..they're just to different degrees.

I think most after-market prices are solely up to the buyer anyway. Unless there's only a few MISB of a certain set left in the world (take Skull's eye schooner, up to $1000 MISB or $200 used because there's only a few MISB left), the prices are up to whoever buys them. The demand doesn't go away so when Lego discontinues the item...prices will rise. Say there's 100 MISB of a certain set left on ebay and 300 possible buyers, the 100 who are willing to pay the most will get the sets. If the 100 sets are sold to people for retail price like many of you are asking, then you still have 200 unhappy people who wanted the set. Either way, you have unhappy people...the fair way to sell the sets is to sell them to whoever is willing to pay the most for them. That's why I don't understand why people are mad at others for selling sets for what some people are willing to pay. Don't get mad at the sellers, get mad at the other buyers for increasing the value of the sets you want.

This is probably my favorite topic on the new forums so far.

[onions]

This was actually a thread i was rather enjoying reading and participating in as well. But I have to say, Tyrant's last tirade has pretty much killed my enthusiasm. Every quote and paragraph is just draining the will to carry on. I do feel compelled to make a few counter points, but it will probably be the last time I post to this topic. The sweeping generalizations you make, Tyrant, is tiring and makes you come off as being overly defensive. You only hear the things you want to hear despite the various other posts trying to arrive at an understanding of the parameters of the conversation. For instance, you asked:

We live in a culture that prizes wealth above almost all else. Is it really so hard to believe people will do what they can to attain it? As several keep asking, what is wrong with making money?

No one said it was wrong to be rich or to make money; the issue is how that wealth and money were made. And if that point is something you can't extract from this thread, then there really is no point in continuing any sort of conversation with you. You constantly bring up the same points over and over again and ask the same questions. Have you even read the entire thread? That's all I have the energy to say.

My favorite quote of yours has got to be this:

I see plenty of people trying to sound like they are taking some moral high road when there is none to take.

And with that I bow out.

[bigospedros]

Pete: go back four pages, I'm just repeating what I said initially. Scalping is an investment with hopes it will be profitable in time. It is targeting specific items by following the interest of the community, and if you want to make any real money you will have to buy bulk. It's a simplification of the overall process, but it's absolutely true.

Even if you disagree with the definition you can at least agree that what I'm describing is clearly taking advantage of the system and collectors to make a profit.

I think you and I are agreeing on a definition, although you're preferring to simplify it whereas I believe you cannot do that because otherwise it's not a specific enough definition to define the term "scalping". For a situation to be true scalping, given that I think we all agree that it's a bad practice, there has to be an underhand motive in it.

Just buying the odd duplicate set in a sale to sell on later, is, in my opinion, not scalping, it's just common sense (on the assumption you're willing to take a risk and tie up some of your disposable income in the process).

anyways ... I'm getting quite bored of this discussion. I'm not arsed if people scalp, because even if they do, so far, their practice has not affected my ability to get the sets I want. I am a collector but I'm not stupid enough to pay the over inflated prices that some people want to charge for very old sets nor am I that bothered about having them MISB since as soon as I get a set, I open the box (carefully) and build it!

The only people / company that has affected by ability to get what I want is in fact TLG, with their crazy preference of making some sets (Golden C3P0, Chrome Vader, Brickmaster etc) only available in the USA! :P

[preterosso]

One philosophical theme I've managed to extract from this discussion is the importance of degree or intent to our moral assessments. Most of the posters seem to feel that buying multiples of a given set is acceptable if the purchase is to add to a collection, and maybe one or two additional sets to sell later is OK as well. So the action itself doesn't matter, only the intent. I find this to be slippery moral ground, not anywhere near a high or low road. To use an extreme example, murder is murder, even if the purse-grabber only meant to knock out the old lady. It's a bit disingenuous to say "some is OK, more is not" and "if it's for your collection, buy as many as you like." Just like more money, increased personal economic utility is also a form of "greed" -- and who among us would begrudge indulging our LEGO fixations?

[kyphur]

I'll put this question before the followers of this thread...

As I said in an earlier post (in this very thread), I'm planning to sell of my Lego SW Collection and I am only missing like 15 sets out of all the sets sold to date.

Every set is complete and only a few have stickers applied (UCS Stats plates, UCS X-Wing, UCS Blockade Runner & UCS Y-Wing) as I purchased them used that way.

I don't ever keep the boxes, every set has been assembled the minifigs that aren't on display are stored in small baggies of the zipper kind.

I'm not selling because I want to make a windfall. To be frank, I've been building this collection for 5 - 4 years now and last year I discovered a new love: Scuba Diving. If you guys think Lego is an expensive hobby try supporting 2 Divers (my new wife is also a diver)!

I'd prefer the sets get into the hands of other collecters who will build, display (maybe even play a little with) and other wise enjoy them as much as I did.

I suppose I could throw them on eBay starting at $0.99 and "let the market decide the value" or I could offer them here in the appropriate section at fixed prices.

Honestly I wouldn't care if someone considers me a "scalper" or not, as great as this bunch is my wife, kids & close friends are the only people whose opinion of me truly matters at the end of the day.

I do feel I deserve to receive fair value for the sets in their given condition, there are now chewed on or discolored elements as I have taken the effort to replace one I found in used sets I purchased.

What does everyone here think would be the most fair way to handle this for myself and anyone who is interested in purchasing a set or twenty from my collection?