Card Grading Costs - what am I missing

[raineybt]

Reentering the hobby now after a 15 year hiatus is jarring - almost like a time traveler walking in and seemingly not recognizing the world. When I stepped away, PSA and grading existed, but it was nothing like it is today. I won't argue the positives or negatives here, but for everyone that's been in the hobby long enough, its certainly different.

I'm looking to answer something that might be elementary, but that I still haven't wrapped my head around - grading fees. I've got my own feelings about the cost of grading increasing with the value of the card (vs. the service provided, insurance costs, etc), but what I can't figure out is how so many graded cards are sold on eBay for seemingly less than the grading fee. If the grading fee is $15 (I'll use PSA published prices only), then why are so many clearly lower grade 60's cards submitted, when the VSP price isn't higher than $20?

Is there a program I'm missing or some sort of economic dynamic that I am not understanding that's allowing a significantly higher amount of cards to be graded than could seemingly be sold for at least $15 more to cover the grading fee? Any thoughts here are helpful - I'm trying to pick up 15 years worth of hobby changes quickly!

[Carter08]

Same question

[ullmandds]

I would have to assume that many of these cards selling for around or less than the cost of the actual grading service were graded a while ago at a lesser cost than todays fees.

[jingram058]

OMG, here we go again.

If you are collecting cards as an investment, worried about such things as wrinkles, trimming, etc., by all means have your cards graded. Not much of a fun hobby, unless you're one of the beautiful people who can throw around a lot of money without giving it a thought.

You can just collect cards, hold them in your hands, and discuss the history with others. That's what I do, and so do the others around here where I live. That's a real hobby, pretty much as it always was, except that even the raw cards cost A LOT more these days.

I like the discussion here on net54, and have bought the majority of my latest collection additions here, and some trades too.

But make no mistake. The vast majority here at net54, and the other forums too, are all about graded cards.

It just is what it is.

[4815162342]

Originally Posted by ullmandds

I would have to assume that many of these cards selling for around or less than the cost of the actual grading service were graded a while ago at a lesser cost than todays fees.

+1

Also, though I believe it refers more to modern than pre or post war vintage, some are calling this the “Junk Slab Era.”

[swarmee]

1) Up until about 4 years ago, you could get PSA grading in bulk for inexpensive cards about $6/card.
2) It's a human condition to overgrade your cards in your own mind, so people regularly submit cards they think are NM when a true result is that they are only EX 5s.
3) PSA has ebbed and flowed over the years with grading to their published standards, and people currently believe they are MUCH tougher than normal on cards from the 70s and 80s than ever before.
4) Once a card has been graded low, there's less of a demand for it, because it no longer has much "upside" (unless you're buying to trim the card and resubmit hopefully for a higher grade).

If you've been gone 15 years, recommend you read some threads over at Blowout covering the trimming scandal.
https://www.blowoutforums.com/showthread.php?t=1298835

[jimq16415]

Originally Posted by ullmandds

I would have to assume that many of these cards selling for around or less than the cost of the actual grading service were graded a while ago at a lesser cost than todays fees.

I remember PSA having monthly specials where it cost as low as $6 each to get them graded but at those prices you sometimes didn't get them back for 2 months!

My oldest sub in their file was 45 cards at $6 each, rec 7/10/2006 and shipped back to me 7/21/2006 for $6 each. My highest value was $250.

Times have changed. Yesterday I sent 1 card and it was more than that sub of 45 cards!

[Carter08]

There are a bunch of 1970s Topps cards with brand new psa certs that are worth and sell for about $10 or less. A 1975 Topps Fergie Jenkins psa 6 will sell for less than $10 for example. Who recently graded that and why? There is something missing in the pricing model. The only thing I can think of is someone was hoping for a 9 and is just cutting their losses.

[Aquarian Sports Cards]

cost averaging. If you submit 1000 cards the wins make up for the losses (if you're any good at grading) So on the lower grade cards you make what you can and move on.

[raulus]

James might feel otherwise, but not all cards are graded in an attempt to turn a quick buck.

[Carter08]

Originally Posted by raulus

James might feel otherwise, but not all cards are graded in an attempt to turn a quick buck.

Very insightful. Many of the folks selling these recently graded cards for less than $10 are dealers who, presumably, are not looking to lose money. I think the OP and I are trying to figure out how this makes sense.

[raulus]

Originally Posted by Carter08

Very insightful. Many of the folks selling these recently graded cards for less than $10 are dealers who, presumably, are not looking to lose money. I think the OP and I are trying to figure out how this makes sense.

If those are the facts, then it’s got to be a case of hope springing eternal. Sometimes you get the grader of death, and sometimes you get the grader of love.

[JollyElm]

292. The Plastic Paradox
A card with a ‘Buy-It-Now’ price on eBay that is less than what it would’ve cost to have said card graded in the first place.

[ALBB]

Yea, that subject is a bit baffling

[Yoda]

Don't forget that getting a card graded also protects it from the elements, ie, dropping your precious Cobb after a few beers and damaging a corner. Guilty.

[Snowman]

Originally Posted by Aquarian Sports Cards

cost averaging. If you submit 1000 cards the wins make up for the losses (if you're any good at grading) So on the lower grade cards you make what you can and move on.

^^This

There are a ton of cards that yield a nice profit if you can get a 10 on them but that you'll lose money on if they come back as a 9. If you're good at grading and you are say ~80-90% accurate with your grades that you expect 10s on, then you'll turn a nice profit and you can just sell the 9s at a loss.

[BioCRN]

I imagine it's a lesser amount of people, but I've run into a few of this type of seller with graded cards...

Sometimes someone will submit 2-3+ of a certain card hoping for a 10 (or similar high mark given the issue) so they can keep one for their collection. When a 10 is practically unobtainable or existing copies are sky-high in pricing, the gamble can outweigh just outright buying it (if they can buy it at all).

The leftovers are the cost of doing business hunting for the gem out the submitted ones. Occasionally they'll get multiples of the high mark card and occasionally they're just looking to recoup any of the gamble cost.

[Huck]

If I purchase a collection of graded cards, there is zero cost (to me) in the grading of said cards. The value is found in a handful of cards and the rest can be sold at what the market bears to recoup costs and hopefully turn a profit if that is the goal. As other members noted, there was a time when PSA graded cards for $6-$7 a throw.

On another note, mid grade collections (50's-60's cards) purchased in the 80's of are higher value today and in my opinion some cards are worth grading. Not every collector is after a PSA 8, 9 or 10's.


Go read the the 1959 Mantle raw thread and then ask yourself why would you drop good money on a raw card. This is coming from a collector who for a long time was on the fence about the grading of cards.

[glchen]

I think there a few reasons, some of which have already been mentioned:

1. The card was graded a few years ago in the past when the grading fees were much lower.
2. The submitter expected a much higher grade for the card, which would have made the grading fees worthwhile. (e.g., expected a 10, but got a 5) This happens a lot for new submitters as folks usually always think their card deserves a better grade than it gets.
3. The submitter knows he will lose money grading the card, but sends it anyway because he wants the card graded to be added to his registry set or some similar reason. Card collectors are notoriously particular about the cards in their collection whether it's the centering or some other reason. They often like their sets to look nice an uniform. Rather than waiting for the graded card to come up for sale, they just send the card they like to get graded. Collectors are also notorious for "changing focus" regularly, so after a while, they decide to just sell off that set when they lose interest.
4. Some dealers (e.g., 4 sharp corners) get good grading deals when they send in thousands of cards, so they submit a huge volume even if a lot of them end up selling for a loss.

[steve B]

Originally Posted by Aquarian Sports Cards

cost averaging. If you submit 1000 cards the wins make up for the losses (if you're any good at grading) So on the lower grade cards you make what you can and move on.

That's the explanation I got the first time I saw a dealer with a ton of graded cards at a show.
Hundreds of late 50's commons at below the standard fee.

They would essentially submit an entire collection less any obviously bad cards and the handful of great ones paid for the lower grade cards. The bulk mid grade commons pretty much just covered the bulk submission fees.

[Snowman]

Originally Posted by steve B

That's the explanation I got the first time I saw a dealer with a ton of graded cards at a show.
Hundreds of late 50's commons at below the standard fee.

They would essentially submit an entire collection less any obviously bad cards and the handful of great ones paid for the lower grade cards. The bulk mid grade commons pretty much just covered the bulk submission fees.

Always amazes me when I see dealers doing this. I always think it's really not that difficult to learn how to grade accurately, but then again, I'm someone with clinically diagnosed OCD and my attention to detail is certainly abnormal. A lot of experienced dealers simply don't know how to grade cards, and seemingly aren't capable of learning how to either. I remember Jason Koonce speaking in an interview once about how much more difficult it is to train graders than he thought it was going to be when he first started ISA. And given the inconsistency we all see now from PSA as they've grown to over 100 graders, they clearly struggle with it as well.

[todeen]

I think there are some great answers here. Regardless, I love buying 8/9 of Barry Larkin inserts or oddballs for $15 or less. I don't need 10s, so a 9 for $11.99 is great.

Sent from my SM-S926U using Tapatalk

[Leon]

Bottom line is the TPG's will charge what they can. And nowadays, it's pretty much like they want a percentage of the value of your card for grading. And of course, if it increases the value by a lot more, then I guess it's worth it. But it doesn't take a lot more time to evaluate a 100k card than it does a 100 dollar card. What, maybe an extra 5 minutes at most? Can't blame them for making money...
.

[perezfan]

After hundreds of hours of deep analysis, extensive research and sleepless nights, I have finally arrived at the undeniable conclusion that....

Grading is a scam

[jingram058]

Originally Posted by perezfan

After hundreds of hours of deep analysis, extensive research and sleepless nights, I have finally arrived at the undeniable conclusion that....

Grading is a scam

+1 on that, joke or no joke. I'll just keep my cards. If I am losing a fortune, too bad. I wasn't mean to have a fortune, I guess.

[Zach Wheat]

Originally Posted by Aquarian Sports Cards

cost averaging. If you submit 1000 cards the wins make up for the losses (if you're any good at grading) So on the lower grade cards you make what you can and move on.

I think this is exactly what you are seeing.

[Bigdaddy]

Originally Posted by Aquarian Sports Cards

cost averaging. If you submit 1000 cards the wins make up for the losses (if you're any good at grading) So on the lower grade cards you make what you can and move on.

It's like being able to sell your losing lottery tickets while holding out for a winner.

[raulus]

Originally Posted by Bigdaddy

It's like being able to sell your losing lottery tickets while holding out for a winner.

Maybe the owner of that 20 million card collection can use this approach to make the math work when getting that collection graded.