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Sales slump?
Thought I might start a similar conversation here as well.
I am at a point where I either “go for it” or pack it in.
Since reopening both stores, sales were very encouraging. I have invested heavily over the last few months. Due to stragus (now very lengthy) absence, I am stuck at the 250k barrier. With a storage unit full (literally) of sets to part.
However, it seems I’m not the only one with this situation. Sales prices at all time low, buy in at all time high, and a lot less sales than a few years ago, the initial uptick going across platforms seems to have gone.
It would seem that the number of sellers/stores have increased quite dramatically but the customer base is not growing, which isn’t a good sign.
I also noticed quite a number of medium size stores going / have gone out of business.
I’m wondering if we’ve reached market saturation? There’s only a finite amount of LEGO folks will buy/store.
Thoughts?
I am at a point where I either “go for it” or pack it in.
Since reopening both stores, sales were very encouraging. I have invested heavily over the last few months. Due to stragus (now very lengthy) absence, I am stuck at the 250k barrier. With a storage unit full (literally) of sets to part.
However, it seems I’m not the only one with this situation. Sales prices at all time low, buy in at all time high, and a lot less sales than a few years ago, the initial uptick going across platforms seems to have gone.
It would seem that the number of sellers/stores have increased quite dramatically but the customer base is not growing, which isn’t a good sign.
I also noticed quite a number of medium size stores going / have gone out of business.
I’m wondering if we’ve reached market saturation? There’s only a finite amount of LEGO folks will buy/store.
Thoughts?
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Comments
I think it's tricky to try and find patterns with such limited information. So much can change from region to region, and it's also seasonal, and there are all kinds of other aspects.
For example, how do you know the customer base is not growing? Unless you really looked into it and have hard data about number of buyers over time, and that number is in fact decreasing. But how/where is that happening. For example, if the number of buyers is decreasing mostly in the US, that probably doesn't affect most stores in Europe.
So my thoughts: it's complicated.
Example: 1 x 2 Brick with Grill, 2877, has a 6 month average of .05. Current is .02 Minimum, .36 Maximum, and .06 Average. When looking to buy, however, the Mode is between .02 and .03 for both New and Used Good in all colours available.
The median, Average, is skewed by those outlier high prices of one to a handful of stores and therefore is above a saleable price.
We have had lots of Active Carts, begun from a buy query of Wish List no doubt, but did not result in an order- we had the parts but the store carts with the lower prices won out.
On the original point October is starting well, mid week too. There’s no rhyme or reason to sales volume!!
Guess it’s all down to price of parts, which doesn’t always mean least expensive in total with shipping, I have found most often it’s less expensive to buy from the store with the most available lots first. Although I haven’t bought much parts in several years now.
As for prices dropping, I think it is in the market's nature to have a downward trend just because of the way that the system works. For example, if I am the only one in the world with a particular part and list it for €1, and they sell outside the EU on Bricklink, they will be recorded in the BL priceguide as a €0.80 sale because VAT is removed. If I then re-adjust my price to the new average, €0.80, and again sell it outside of the EU, it will drop further, etc etc. Another factor is European sellers working with Brickstock, because Brickstock excludes VAT and therefore provides lower prices than the actual priceguide on BL. And, of course, if a part is listed by several sellers around a fair price, the buyers will go for the cheaper half - even though the average price was good. That'll make for a low 6 Months Sales average, around which sellers will list a part, and again the cheaper half is sold, again adjusted around the new selling price, etc.
So in short, many factors that naturally push the price down and down. It's just technical mechanisms, unrelated to the real value of the parts. I think sellers will have to have the guts to price significantly higher than the Last 6 Months Sales average. If that won't happen, then we're really going to see an endurance race. In either scenario, I think the sellers that are serious and dedicated will be able to survive (someone has to supply the Lego, after all). But today, I would not start a store anymore. If I was at that crossroads, I'd decide to ditch it and make money with something else.
For pricing, I do probably the worst thing one can - I use current average (though I price sets and minifigs manually). Sometimes I jiggle it around and globally drop it 8%-10% if I see sales slowing, but that has seemed to work for me from day one.
Of course those skews still kill me - anytime I do a global reprice, I then have to spend 4-6 hours looking at all my parts sorted by high price, as what should be a $0.08 part is selling for $7-$10.00, wildly.
It's those couple of really high priced (and really low priced, too) stores that just kill it, sigh - or the rare circumstance where someone added a part to their store which had never sold/been listed before in the condition listed, so it's defaulting for them to $99.00, which actually shows in the catalog until they reprice it. That's happened to me twice, lol - just crazy timing and circumstance in that scenario.
@unbrickable I usually add new items whenever I have time to part out sets, I haven't added new items for over a month now and I'm sure that's affecting some sales too! You just can't have enough gray bricks and plates!!