How Do I Sell My Train Collection?

Every so often I get contacted by someone who has accumulated or inherited an extensive train collection of unknown value and who has no interest in keeping the trains. Often there are mixed motivations - a collector's survivors would like to see the formerly cherished trains "go to good homes," but they are also secretly hoping that something in the collection is valuable enough to compensate them from the hassle of becoming its unwilling caretakers. Having recently buried a father who collected trains, I have a pretty good idea how they feel.

I almost always find myself wishing I could do more than provide advice from a distance. Sadly, I already have too many trains - I should be selling off, not buying. But I can hopefully give you some useful information and suggestions.

First of all, if you are a survivor of a train lover, please accept our heartfelt sympathy for your loss. That said, you probably wouldn't be reading this article unless you hoped to - or needed to - achieve some value out of the collection you've inherited (or maybe just accumulated when you had more money and energy). So the balance of this article may seem a little mercenary, but, sadly, financial realities don't change just because these once-cherished treasures came your way under difficult circumstances.

Whatever the perceived value of the collection, you should know that:

• Certain train clubs and charities would appreciate the donation. If you want to get a tax writeoff, though, look for a tax-exempt organization, and do a careful inventory before you pass it on.

• You will have the least hassle and recoup the least income, if you sell the whole collection without doing an inventory first.

• If you just want to recoup any significant financial renumeration from the collection (even a tax deduction), you need to create an inventory of each piece (brand, model number, and condition).

• To achieve the absolute maximum value will usually require maximum hassle (for example documenting, testing, photographing and posting each item online separately).

Though it's not exactly scientific, I have created a sort of chart to illustrate this principle. At the left are people who don't even do an inventory, preferring to give it away, or to call the first collector or reseller they find for a bid.

At the far right are the people who make selling the collection a full time job, but who are really recouping the fruit of their own labor even more than they're recouping the value of the collection.

Know What You Have

Hopefully, you can see that the collection doesn't even begin to accumulate any value to speak of until you know what you have. If you can't inventory the collection by yourself, consider contacting the appropriate local model railroad club and asking them for help. Maybe you could even offer to make a donation to their treasury if some of their members would come out and put things in order for you.

The truth is, unless you have specifics, no one trustworthy will make you an offer worth considering. And nobody with any brains or scruples is going to make a fair bid on your collection unless he or she has some idea of what is included.

Don't Trains Always Increase in Value?

If you overpay for trains, even desirable pieces take a long time to make that up. Like a new car that loses 25% of its value when you drive it off the lot, folks who pay $500 for a train set that they could have got for $350 with careful shopping are going to wait a very long time before the set is worth $500 again (if it ever is). That doesn't mean it's worthless - kept in good condition, it might be worth $250-300 to the right buyer. But it will be a very long time (perhaps a lifetime) before it's worth what was originally paid for it.

In addition, some trains never gain in value, or at least enough to keep pace with inflation. This is especially true with trains that most owners just want to run, including most non-LGB Large Scale (Garden) trains, most HO trains, virtually all toy plastic trains, and even a good percentage of Lionel starter sets (some of which were produced in such numbers, it will take 60 years for them to get rare in any meaningful sense).

Another dynamic is that the collector's market for many traditionally collectible trains (like mid-century Lionel and American Flyer) has slowed, and is showing every sign of reversal. After all, the biggest train collectors were people who grew up with real trains as an important part of their lives. Those generations are aging, to say the least, and more and more large collections are coming on the market. That doesn't mean that the truly rare pieces are now worthless, only that, with less demand, they may not command the prices they once did for decades. Worse yet, a lot of mid-range stuff that seemed rare only because it was being hoarded is now getting much easier to find, with sliding "values" to match.

What About Price Guides?

The first thing you need to know is that most of the values recorded in published guides were set when the economy was good and interest in collecting those trains was at its peak. Even then, they typically represented the maximum an experienced dealer with a shop or a good list of customers might get after he had checked out and cleaned up the piece, then put it on display at significant cost to himself. (Today that dynamic has largely shifted to cleaning it up, photographing it and posting it on eBay by itself, but the principle is the same - the "collectible guide" price includes a lot of personal effort, as well as access to a strong market.")

What the guidebooks ARE useful for is showing the relative value of certain pieces within traditionally collectible lines. For example, Lionel might have made ten thousand of a certain car, then changed the paint color or the number on the side and made three hundred. A "price guide" could help you realize that the car you had was the rare one. But the "value" placed on the car is only an estimate, made when the economy was good and there were many more active Lionel collectors than there are now.

Though we've talked a lot about Lionel, things are even worse in Large Scale (garden trains). LGB is the only major Large Scale brand that attracted the same kind of collectors that Lionel trains used to. Still, a bunch of LGB trains have wound up on the used market, so the end result is that LGB collectors have kept the value of used LGB trains from dropping as fast as other Large Scale brands. Worse yet, the 2008-2010 transfer of LGB manufacturing out of Germany into other countries including China has discouraged some collectors from their quest to own "one of everything."

The other Large Scale (garden railroad) trains tend to drop in value the older they get, because most people buy them to run on their railroads, often outside - a far cry from the hermetically sealed vaults of the professional collectors. To train operators, changing a car's color or number doesn't make it any more useful or collectible, the way it might make a Lionel car more "valuable" to collectors.

To add to the confusion many people call any trains that run on 45mm track "LGB," the same way they call Puff facial tissues "Kleenex." But confusing Puffs with Kleenex will not cost you real money. Confusing $50 hardware store train sets with $500 collectibles because they run on the same track could. In fact, I often used to see "LGB collections" advertised on eBay for $500-$1000 without one LGB item (or even any item worth walking to the mailbox for).

The "take-away" from this section is that the odds against you having a truly rare collectible in your "collection" are pretty high. But you'll only know for certain if you take the time to inventory each piece and take some steps to see what the individual pieces are worth (see below).

You probably don't want to slap a $50 price tag on an unsorted box of trains and always wonder if you gave away something valuable. But slapping a $2000 price tag on an unsorted box of trains in the hope that you have something worth looking at twice usually means you'll be sitting with that box of trains for quite a while.

Considering a Donation?

• Sadly, with the tax law changes for 2018 and beyond, it's not likely that your donation will make a difference in your taxes unless the collection was sizable, say, worth $10,000 or more.

• Most train clubs are not tax-exempt, but many set up temporary Christmas railroads at, libraries, nursing homes etc., so your donation could help them bring pleasure to others.

• If you need a tax deduction, Scouting chapters offer Railroading Merit Badges and some have scout leaders who would appreciate gifts of equipment that would help the youngsters earn them. The scout leader may help you inventory the collection so you can justify the deduction on your taxes.

• If you're just interested in getting it out of your house, organizations like AmVets or Salvation Army will be glad to pick up the trains for you, but you will have to do the inventory for yourself for your taxes. And get a receipt.

• If taking your donation off your taxes is important to you, please follow the instructions in the "Maximizing Value" paragraph below.

Considering Selling to a Collector or Reseller?

• Without Inventory - If you don't have time or energy to do an inventory, contact the local hobby shop and train clubs to see if there are any collectors who'd be willing to come over, see what you have, and offer you a fair price. If possible, take a snapshot of the most impressive pieces to help them determine whether they'd be wasting their time. Many clubs even have members who will be willing to help you sort things out on and even tell you which pieces are collectible just because they're nice people. Be sure to thank them profusely if they do, and don't demand that they buy something from you. If they know trains well enough to help you sort this stuff out, they probably already have too many trains in their own basement.

• With Inventory - Ask the local hobby shop and clubs whether they'd permit you to post the inventory in their store or pass it on to their members. This will keep from wasting the time of anyone who really isn't interested in what you have, and attract people who might otherwise ignore a generic "train collection for sale" announcement. Make it clear that you're only interested in selling the collection, though.

Either way, you need to understand that few people who buy collections will can afford to pay much more than 30% of the maximum potential value of your trains if he or she cleaned them up and sold them individually. That is very fair considering the amount of time, energy, and expense they will be putting into it. Taking digital photos and paying eBay fees, or driving to train shows and paying to rent tables - however they plan on getting your trains in front of their customers, they will be investing money and serious time. So what if a piece that the collector paid $50 sells for $150? By the time he's put two hours into cleaning it up, six hours into driving to the train show where he sold it, etc., he may only be making minimum wage or less on that piece. In today's economy very few train collectors or resellers are really in it for the money.

Considering Breaking Up the Collection?

Maximizing Value - As mentioned earlier, you maximize your income if you clean up each piece and sell it separately, say on eBay . But you have to decide if, say, an extra 30 hours of work for you is worth another, say, $250. That's not even minimum wage if you think about it.

If you DON'T want to liquidate your collection at "wholesale" pricing (or less), you will need to:

• Do a detailed inventory of your collection, including brand, model, model # if you can find one, and condition of each item. Test the locomotives to make certain they work. If you don't want to test or can't test the locomotives, you'll have to list them "as is" and expect a far lower price than the same locomotives would demand if they were working.

• Go to eBay and search for these one item at a time. Put a "watch" on each item that matches one in your collection . Try to match brand for brand, even if you can't match the specific product identically. For example, comparing an LGB Union Pacific boxcar to an LGB New York Central boxcar should put you in the same ball park, whereas comparing an LGB D&RG boxcar to a Bachmann D&RG boxcar will not - the latter cost much less to begin with.

• Do not be fooled by asking prices. Many will be far too low, and many of the "buy it now" prices will be far too high. By putting a watch on each item, you'll be able to see what it actually sells for, and that will get you MUCH closer to what your item is worth.

• This could take some time, maybe 5 hours a week for a month, before you have a general idea of what your collection would be worth if you broke it down and sold it piece by piece.

• If you CAN'T find a particular item that you think looks like it might be worth something, Google that item and see if you get any hits. If it's an expensive collectible, you'll get hits. If you don't get any hits at all, try finding a few similar items and averaging out the potential value, or make a short list of things you want to check in a price guide next time you see one somewhere.

• If you want to break up the collection and try individual sales without going through eBay, a "middle road" might be contacting the appropriate train clubs in your region (Google them) and sending them your inventory, with asking prices corresponding to final ebay prices you noticed.

• A Craig's List entry that included your inventory would DEFINITELY get interest, although you might just get "cherry pickers" who would want to take one or two desirable pieces and leave you with common stuff that would be hard to find buyers for.

Taking the Middle Ground - Selling an Inventoried, Tested Collection to a Collector or Reseller - If you discover that your equipment is worth enough money to take seriously, but you don't want to bother with individual sales, you could send your list to a collector or a "train trader" (who lists on eBay or travels from train show to train show). Quote an "asking price" that is, say, 60% of the total value you've figured, based on actual eBay sales and similar research, and let him or her negotiate from there.

Don't be surprised if the collector's or "train trader's" offer is closer to 30% of the value you figured on. He or she probably already has items that duplicate ones in your collection. Even if an item is desirable, the expenses and hassle involved in reselling it demand that the person pay no more than 50% of what it's worth on the open market.

Path of Least Resistance - Selling an Uninventoried, Untested Collection - If you haven't inventoried or cleaned up your collection and/or tested the locomotives, and you just ask a collector or "train trader" to "make an offer," you'll probably get an offer that is 20%-30% of what the person thinks it would be worth if he or she put in all the work to get it ready for sale. That's not "cheating;" it's recognizing that he or she will be doing a lot of work you would rather not do yourself.

Generally the experienced train collector or reseller knows at a glance which pieces are worth taking off your hands and which pieces he or she will have to more or less give away - a list that grows longer every year the person has been doing this. If you're not happy with what the person tells you, don't get upset and make a scene; the next person may offer you less, and you'll have to come back to this person.

Keep in mind that even if you make a big enough donation to receive a tax write-off, for most people the differences will only be about 20%-35% of the value you claim.

Yes, there are thieves out there claiming to be collectors, who will tell you that your rare pieces are all common and low-ball you. Again, if you're concerned about that sort of thing, do the eBay "watch" exercise I described earlier. If the main thing is getting the collection out of the house, and maybe recouping a few dollars, then at least you've done due dilligence and made a conscious decision.

Whatever you do, don't feel guilty, or spend the rest of your life worrying about it. You didn't choose to be the curator of this collection, but as such, its disposal is entirely up to you.

Who Regulates Collectors?

Nobody. There is a group called Train Collectors of America that sets standards for judging the condition of collectibles, etc. But they have no way of policing every transaction made by every individual member. The majority of TCA members I've known were ethical people. The VAST majority I know seem to use their membership as sort of a "secret handshake" during member-to-member transactions. If nothing else, they know that "burning" another member of their community will have repurcussions.

But in my experience, the ones who brag about their TCA membership to non-members as a "proof" of their character are no more likely to give you a fair shake than the average non-member. Not only that, but when they're trading outside of their specialty, they may know no more about the product they're selling than the average person on the street.

What About Leftovers?

If, after all your research, you decide that what you have is not really worth that much money, or if you've got a bunch of stuff left over after selling off the best stuff, you might think again about the deduction option. If you're not concerned with the tax deduction, there's probably a local train club that would be grateful to have more inventory for their public displays.

Conclusion

You might also want to take a look at the FamilyChristmasOnline.com(tm) article How Much is My Collectible Worth to get a peek into the dynamics of other collectible markets.

In the meantime, take time to appreciate the pleasure these trains once gave, and remember their collector thougthfully (even if it's you at an earlier age).

And the next time you're in the attic, you might think about whatever "collection" your own heirs may wind up sorting through. Did you REALLY need all of those Beany Babies? Or eleven guitars? Or . . . ?

Best of luck, all.

Please let me know if you have any feedback, and have a great summer,

See you online,

Paul