taken the train down from Kansas City with two empty suitcases and a check. He opened the trunk of his car; we transferred all the sacks and pieces into my suitcases. I gave him the check in the parking lot of the train station and we said good-bye. I rode the next train back, flipping through all of the instruction manuals. So it seemed like a drug deal, which is what it really was ... anybody watching would have thought, this is really odd.”
The switch had flipped. Andreas began actively buying and selling. He found himself racing to the library to win a last-minute eBay auction for a train car that was missing from his collection.
But it’s a funny thing when adult fans have children. They must make a choice about whether to let their kids play with the LEGO bricks on the shelves. Some collectors have piles of bricks for their kids and piles of bricks for themselves. Others consider every builder in the house to have equal rights to the pieces. Andreas, it turned out, was good at sharing.
“I was the collector wanting to display what I got, but kids change that a bit. I let the kids play with them and of course pieces get lost or broken, and so it really doesn’t matter as much anymore,” says Andreas.
When completing his collection became less important, he discovered that it was easier to sell. And after visiting a local BrickLink seller to save on shipping, Stabno began to compare prices on the Web site, calculating that there was a slight margin on loose brick he had bought in LEGOLAND Deutschland (in Gunzburg, Germany, about an hour north of Munich).
Since he was less attached to his personal collection, several of his unopened sets became the seed capital for him to launch a store, BrickScope, in September 2006. He can’t help being precise; Andreas might be the only seller around with a formal business plan. Today, Andreas will buy anywhere from twenty to one hundred copies of a set, and he sold just over a hundred thousand pieces in April 2008.
“I miss the old days of not having to worry about the finance side and just building something for the fun of it. Maybe when the kids get a little older ... ,” says Andreas.
But sellers still aren’t that far removed from the obsessive side of the hobby. As part of the research for his business plan, Stabno figures that out of the roughly two thousand sellers on BrickLink, there are only about ten stores that operate full-time. Most sellers are just funding their brick habit, parting out a set to keep what they need and selling the rest in an ongoing quest to break even. Many call themselves “hobby sellers” in order to avoid dealing with the Internal Revenue Service as a formal business online.
Hobby sellers are required to report income to the IRS, but many hobbyists choose to not report their transactions. And since it’s likely not a significant amount of money, and they aren’t required to possess a formal system of accounting, the odds of the IRS being concerned with those transactions are probably quite slim.
Conversely, the IRS sees hobby sellers as business entities when it is apparent that someone is trying to make a profit, has made a profit in three of the past five years, and is involved in regular business transactions.
At the same time, sellers remain adult fans, looking at what others are building, and at what sets LEGO is releasing, in order to keep track of the imperfect secondary market. New items on the shelf usually run around ten cents per piece, while the Star Wars or SpongeBob sets might be a bit more expensive because of the licensing fees attached to intellectual property rights. Bulk pieces offered in tubs by LEGO will likely be in the six- to eight-cent range, since there aren’t as many specialty elements.
Unlike sets in retail stores, used or resold pieces don’t exist in a vacuum. When an adult fan uses up a vast quantity of dark green bricks to build a scale model of a military helicopter, it can drive up
The switch had flipped. Andreas began actively buying and selling. He found himself racing to the library to win a last-minute eBay auction for a train car that was missing from his collection.
But it’s a funny thing when adult fans have children. They must make a choice about whether to let their kids play with the LEGO bricks on the shelves. Some collectors have piles of bricks for their kids and piles of bricks for themselves. Others consider every builder in the house to have equal rights to the pieces. Andreas, it turned out, was good at sharing.
“I was the collector wanting to display what I got, but kids change that a bit. I let the kids play with them and of course pieces get lost or broken, and so it really doesn’t matter as much anymore,” says Andreas.
When completing his collection became less important, he discovered that it was easier to sell. And after visiting a local BrickLink seller to save on shipping, Stabno began to compare prices on the Web site, calculating that there was a slight margin on loose brick he had bought in LEGOLAND Deutschland (in Gunzburg, Germany, about an hour north of Munich).
Since he was less attached to his personal collection, several of his unopened sets became the seed capital for him to launch a store, BrickScope, in September 2006. He can’t help being precise; Andreas might be the only seller around with a formal business plan. Today, Andreas will buy anywhere from twenty to one hundred copies of a set, and he sold just over a hundred thousand pieces in April 2008.
“I miss the old days of not having to worry about the finance side and just building something for the fun of it. Maybe when the kids get a little older ... ,” says Andreas.
But sellers still aren’t that far removed from the obsessive side of the hobby. As part of the research for his business plan, Stabno figures that out of the roughly two thousand sellers on BrickLink, there are only about ten stores that operate full-time. Most sellers are just funding their brick habit, parting out a set to keep what they need and selling the rest in an ongoing quest to break even. Many call themselves “hobby sellers” in order to avoid dealing with the Internal Revenue Service as a formal business online.
Hobby sellers are required to report income to the IRS, but many hobbyists choose to not report their transactions. And since it’s likely not a significant amount of money, and they aren’t required to possess a formal system of accounting, the odds of the IRS being concerned with those transactions are probably quite slim.
Conversely, the IRS sees hobby sellers as business entities when it is apparent that someone is trying to make a profit, has made a profit in three of the past five years, and is involved in regular business transactions.
At the same time, sellers remain adult fans, looking at what others are building, and at what sets LEGO is releasing, in order to keep track of the imperfect secondary market. New items on the shelf usually run around ten cents per piece, while the Star Wars or SpongeBob sets might be a bit more expensive because of the licensing fees attached to intellectual property rights. Bulk pieces offered in tubs by LEGO will likely be in the six- to eight-cent range, since there aren’t as many specialty elements.
Unlike sets in retail stores, used or resold pieces don’t exist in a vacuum. When an adult fan uses up a vast quantity of dark green bricks to build a scale model of a military helicopter, it can drive up
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