Will the grotesque rise in grading costs eventually translate to higher prices?
 

With grading as expensive as it is for the foreseeable future, does the existing stock of graded cards increase in sales value as a result? I'm not talking a 33 G Ruth. I mean the sub-$50 cards that fill out many sets. If my replacement cost for a card is the card cost plus $30 will that have an effect on prices? Has it already?

I'll give you my best yogi berra answer -- only if people pay more.

Hey Adam. It's hard to tell with everything having gone up so much this past year. But I believe that the long term effect here is actually to kill off graded set collecting. I've been waiting so long to submit my '33 Goudey commons at a reasonable grading fee that I'm pretty much over it now. I started a new set and decided to collect them ungraded, the first time I've done so in a long time. I also think that when this current boom ends, and it will end, that the TPGs may wish they had the graded set collectors back. It must have been a not insignificant portion of their income pre-COVID. By most accounts, younger collectors are generally not set collectors anyway, but removing the ability to grade commons for 1 year+ is going to drive many of us existing graded set collectors away from that area of interest, as it has me.

I don't know what they (TPG) could do differently right now, maybe specials for grading "vintage" commons, but they probably don't care about us enough... yet. Wait until they have these bloated grading departments with nothing to grade. The grading fees will have to come down. I'm waiting for the inevitable downturn with interest, but I'm becoming much more happy collecting ungraded cards day by day.

EDIT: In fact, I cracked out 5 T3's from their SGC holders last night. Mostly because I don't like the look and size of the SGC holder for T3's (still much preferred over PSA for most other prewar). It actually felt really good freeing the cards, I enjoyed it much more than I thought I would :)

Super Stars in Higher grades 7-8 I think Yes. It will be to expensive and risky to further play the grading game.

I think chadeast has an interesting point. It could kill graded set collecting if prices never come back to reasonable levels. Although I suspect they will eventually though. PSA probably only offers reasonable bulk pricing through quarterly specials in the future I would guess. I know Nat Turner said this was important to him, so I think it'll be back in some form at some point. The other issue now though is the moving targets with the grades themselves. I have about 150 or so 1986 Fleer basketball cards that are all in PSA 8,9,10 condition, but after watching them moving the goal posts recently, I'd be too afraid to send them in for fear of them all coming back as 7s. They have a serious problem on their hands and they need to fix it ASAP or PSA will lose their crown.

But at the end of the day, yes, economic theory would predict that the value of current slabs would increase unless for some reason the market decides to stop carrying about them.

Yes, Chad, I think you are correct. Interest in vintage complete graded sets are going to decline, if they haven't already. There will still be complete sets, but only the stars will be graded. The cost of getting mid-grade commons graded is just not commensurate with their value, at this point. As for Adams question about rising costs for newly grade cards, it will come down to supply and demand. For high demand cards, the answer is probably yes.

+1

It will definitely have an impact on low-end graded cards that were graded way in the past at much cheaper fees. For someone to go out and acquire a raw card today, and then pay the higher grading fees asked for now (and likely continuing into the future), that grading fee figures into the overall cost. If a seller who had that same card already graded from years earlier at a nominal grading fee goes to sell it today, they'd be foolish not to bump up the asking price to cover the increase in grading fee cost knowing the grading fee is part of what they are actually selling now.

It does seem that this would make people who are into the set registry less likely to continue going forward because of the added costs and delays of getting all the common cards they need to complete registry sets graded as well. But maybe that is part of the plan all along. The recent temporary stop in taking new submissions and increased grading fees was done to curb the excessive amount of work and backlog the TPG was dealing with. This may help the workflow for them going forward, while still allowing the TPG to continue grading the more valuable, higher end cards, at much higher grading fees. So it ends up being a win-win for the TPG, they do less work, but charge more for it.

cost
 

Yes, grotesque , ugly. and unattractive too

That points out an interesting thing. Originally, the Registry was what seemed to boost and be the driving force behind why one TPG's graded cards would apparently be worth more than another TPG's similarly graded cards. But that intrinsic extra value attributed to PSA cards seems to have been taken by the new investors/money coming into the hobby during the pandemic as an overall indication that PSA graded cards are worth than other TPG's cards period.....registry or not. So these new investors want PSA for the money, not the Registry. So what happens if at some point in the future these new investors/money in the hobby decide cards aren't for them, and we start to see huge drops in prices as they pull out and look for investment opportunities elsewhere? It has already been mentioned that a lot of prices, at least for vintage items, have already started to come down from earlier this year. If things ever do go back to anywhere near what they were pre-pandemic, I wonder if this will all have an ongoing negative impact on the Registry effect on card values, and therefore PSA may not continue to have the overall dominance in value over other TPG graded cards that they have now?

Personally don't think the new investors/money will ever totally abandon the hobby now, but can see a pullback and change in future investing focus as we come out of the Covid pandemic.

I know I maybe in the slim minority but I think a focus on raw cards to grade for the registry along with lower price points for grading other then quarterly specials are a thing of the past.

This is a white collar hobby now, not blue collar.

Grading cards will always be big business especially as new money and inexperienced collectors get into collecting/investing.
Since they will not have experience they are going to gravitate more towards graded cards (especially the more the cards are worth)
However, For the people doing sets they will only either 1. Buy cards already graded or 2. they will only get graded cards that have higher values that makes it worth getting graded and the more common cards in the set will be left ungraded.
Most of the new money and collectors do not seem to be going for complete sets(unless buying unopened boxes and cases of cards) and are going more for the famous players, HOF'ers etc

Hopefully the grading prices will go down over time. But I do not see it unless there is a big drop off in volume because big business is always moving up prices and always looking at Year over Year Comps in Sales. If you drop the prices for grading (vs the higher prices the year before) you actually have to grade alot more cards to make up for the difference lost from each cards lower grading fee

I think collectors will be far more selective about which cards to submit for grading. Given the price increases and the time lag, it just might not be economical to do so unless they think card prices will rise forever. Which I doubt.

I don’t think the prices have risen for that reason, not yet anyways, I’m sure they will.

Keep in mind, there are still a lot of cards sitting in various stages of the grading process that were submitted under quarterly grading specials in Q2/Q3 of last year at ~$8-9 for bulk submissions. The owners of those cards could afford to sell theirs cheaper if they chose to do so, but going forward, selling low grade graded commons just won’t make sense unless the floor $ of the cards increase.

Soon the prices will rise. I doubt that set collecting will die off, but the average GPA of sets will increase. Some commons cards can justify a $30 grading fee if they’re in good enough condition. If you want to complete a set you’ll either have to find old slabs at inflated prices or have a card good enough to justify the “exorbitant” fee. Building a “cheap” set of GD-VG cards probably won’t be a simple process. Less set volume but higher quality is my guess.

The new most annoying phrase in the hobby will become “it cost me X to get this graded” which will replace the dreaded “I’m into it for X. I can’t do less than Y”

LOL. When's the last time you heard, I am only into it for X, so you can have it for Y even though market is much higher.

That's usually reserved for mutual friend collectors helping each other out.

When I buy GU flannels, they sometimes come with a LOA from a TPG like SGC or MEARS or Bill Henderson. But sometimes they just come with a letter from the AH. For example, I recently got several jerseys from Hunt and they came with their letter. I trust Hunt, so that's good enough for me.

I think the same could be done with cards. Reputable auction houses, of which there are at least a dozen well-known ones, could slab the cards they sell with their own guarantee of authenticity. They might not want to absolutely guarantee no alterations, as they can be very difficult to identify sometimes, and they may or may not want to assign grades. But they could at least assure the buyer they are genuine.

If I'm buying a card that Hunt, or LOTG, or REA, or Lelands, etc., etc. says is real, I would have the comfort level required to bid strongly. Same goes with Greg Morris, Chandy Greenholt, and many other dealers.

So, just as an AH will give me their letter on a GU jersey, I'd love to see them do their own card slabbing on higher end cardboard.

I just hate hearing what you paid for it at all. Not something I take into consideration when buying.

I think they bring back the value and quarterly specials at some point, for the set collectors and registry junkies.

Actually, I think they’ve said they’re extending collectors club memberships until not only value is back, but that you get as money months of “value” as you’d have had if they hadn’t shut it down.

Problem is that cards are so much more dependent on condition in determing value, and almost everything is sold online anymore so you can't always get the sense of what a card's condition and worth is from a scan. If not for the internet and Ebay, not so sure grading would be as important as it is today.

Doesn’t Goldin do this now? :p

But true. What you are into a card for always is irrelevant because the comparison is with what is available on the market. In this situation I could see a rising premium for graded vintage HOFers who aren't 10s or Mantles simply because the inventory cannot be replaced cheaply, even if the set thing goes by the wayside.

Johnny is right about this thing of ours losing its blue collar echelon, though. I would even suggest that it is going beyond white collar into the professional or entrepreneurial or financial classes when it comes to an increasing number of cards and sets.

I could not agree more.

Good point. So if a reputable AH or seller offers a card and describes it as VG-EX or whatever, they could slab it with their own label and put the grade on it.

I'd pay higher for a card graded by any one of the many reputable people in this hobby/business, but buying raw online makes me somewhat nervous. And I would trust many of those sellers to do as good a job of grading as PSA.

Most of what I buy now is unslabbed. The key, as is often repeated here, is to find a reputable dealer whose eye you trust and establish a relationship. if something gets missed, as happens, you know they'll stand behind it. I'd buy without hesitation from someone like Brian Marcy at Scottsdale, for example.

I agree, but when your cards are sold (by you or your heirs) the provenance is lost. If they were in a Brian Marcy slab, that assurance of genuineness would carry with the card no matter how many times it traded hands.

Perhaps, and this is just a hypothetical, the buyers could make their own decisions?

Sure. But not everyone is good at spotting counterfeit or trimmed raw cards on ebay or other online listings, and that holds prices down vs. cards buyers have confidence with.

I sell original seats that came out of Metropolitan Stadium in MN, which used to be where Mall of America stands now. You might be surprised how many people buy these old seats and ask for a LOA. My first thought is, "What else could it be? If it was from County Stadium (Milwaukee) or Comiskey or Wrigley it would be worth twice as much..."

But I give them a LOA and that gives them the comfort and assurance they want. I suppose it covers them for when their neighbor sees it and says, "How do you know it's real?"

The problem is that there is so much already graded, and more and more cards constantly being graded trying to take advantage of the recent surge in prices, that the volume of unslabbed raw vintage cards is getting smaller and smaller every day. It is getting harder to find nicer, unslabbed vintage cards for sale, especially when talking about the more desirable HOFer/star player cards. The way things are going you may end up getting stuck having to overpay for a lot of graded cards you need/want, and then make the hard decision on whether to break them out of their slabs or not. Even if you truly just collect and don't plan to ever sell, things can always change. Or if you don't sell and your time comes, do you want to leave your family like that where they have to worry about getting them graded again to maximize sales value?