Quote:
Originally Posted by Peter_Spaeth
I'm not even sure PSA is a monopolist. What are the barriers to entry, a factor that must be considered in any analysis of whether a firm can exercise monopoly power? We aren't talking manufacturing automobiles or airplanes, we're talking a building, some employees, some cheap plastic slabs and a sealing machine. If someone wants to compete in this space, it wouldn't take a prohibitive amount of capital. Baker and Rocchi did it with GAI, they just didn't do it right.
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They certainly aren't using predatory pricing. PSA has gradually raised their prices. Even with the recent price increase volume is up. If they were charging too much submission volumes would fall and they haven't. Quite frankly if per card pricing was what it was just a few years ago their backlog wouldn't be 700,000 it might be 1,200,000. I have a stack of cards I would love to sub but you need to get to 100 to get to $8 a card. Most of the cards I collect aren't super expensive so the break even point per card has been elevated significantly and so you have to make decisions based on those economics.
I do think there is a point where they could choke off lots of demand so there is a balancing act with prices that is healthy. The secondary market resale value is what drives a lot of submissions and if people are always losing they will pull back or quit all together.
I routinely see people selling low grade modern wrestling cards that never had a chance to be a winner to begin with and with a lower grade have very little value even after grading. If prices move up too much these type submissions dry up quickly. PSA needs these and so keeping prices low enough to entice submissions is paramount and high enough to limit demand. Not easy.