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How To Buy Lego Cheap and at a Large Discount
There is a huge market for Lego developing, and in large market there are price variations one can take advantage of. The marketplace for Lego has grown enormously since the introduction of Mindstorm the robotics orientated Lego. Now Lego is not only in the realm of children's toys, but it is of interest to many adult institutions. Engineering schools, executive eduction, hobbyists, and of course hackers, are re-inventing the way Lego is used. For economists the little Lego commodity is the ideal way to study micro-markets.
What better micro-market with near fluid efficiencies than found on eBay. In fact a huge amount of Lego pieces are traded everyday on eBay. Now like every other market, a little inside information can help you identify pricing opportunities. This article focuses on buying Lego on eBay, and specifically how to buy it cheap and at a discount. In short how identify buying opportunities.
This article should be read together with my longer piece and a web site which produces the information required to identify buying nuggets. Find the links and URL's to these two sites below.
Most information on eBay focuses on the selling element, how to sell your stuff. I have tended to specialize on the buying end and trying to identify market opportunities and price in-efficiencies to really capture excellent deals. Let's briefly understand the dynamics of the eBay market place. Like any other market it is supply demand driven, and like a large flee-market if a buyer has knowledge of how many items are for sale at what prices and how many other buyers are in the market, then that buyer can capture the upper hand.
Lets examine supply. The eBay supply dynamic is a little different in that supply of an item must be seen at a point in time. In other words, because auctions end at different times, one needs to grasp the number of auctions ending in close proximity for the same item. This gives you a feel for the supply of items or in our case Lego. What makes this interesting is that today there could be a large amount of auctions ending for your item, but next week there could be very few. This is one element driving the price. Generally this information is available approximately one week out on the eBay site.
The demand side is slightly more complex and hidden. It is some of this data that the web site I refer to at the bottom helps identify. Demand in eBay terms is measured (by sellers) as a number of factors - how many people view my auction, how many people ask questions, how many people place me on their watch page, and how many people actually bid. Obviously as we progress down this list the data become more valid as an indication of demand. Page views are not easy to obtain, although some sellers place a publicly viewable counter on their auction pages. Questions and watchers are available to sellers, and the special web site mentioned below will expose this information. Number of bids is available for all to see.
Now if we happened to produce a graph as one auction progresses of the changes in the number of questions, watchers and bids, once can easily see how the demand is changing as time progresses. Typically if questions are high and watchers are high, but bids are low, this may indicate some confusion and a possible buy opportunity. If watchers is very high and climbing, but bids are low, this can point to a last minute bidding war, and a stay out indicator.
Armed with this information and also a quick summary of other similar auctions ending soon, plus a quick feel for the skill set of the seller and the current highest bidder, once can make see a picture very different from the average eBay buyer. Soon the trained eye will see some nice buying opportunities. For the serious collector or Lego enthusiast this will soon bring in parcels of Lego pieces and sets that are quite a bit cheaper that retail. For example it is quite possible to find gems at 50-70% of retail prices. Lets face it, most Lego pieces don't degrade or damage easy, so the aftermarket such as eBay is the idea place to buy cheap Lego.
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