PSA Economy – Ground Truth

[53toppscollector]

If you look at the current tiers:

Walk-through: $600
Super Express: $300
Express: $150

Logically, Regular Service will open at $100 per card. Economy will open at $75 (possibly $50) per card. People suspected Regular would come back on October 1, I think it might be a bit later, but sometime in October seems likely. I would peg economy opening back up in early 2022.

Value/bulk is likely not going to open until mid-2022 at the earliest, if it even opens in what was considered "Value" before.

PSA has hired a ton of new employees, and once the backlog is cleared, they'll need work to justify those new employees. I think Nat Turner wants to keep PSA busy, so I think they will open Regular again soon.

That said, they've basically had the faucet shut off for what, 6 months? There are lots of people out there who have been accumulating raw cards and just holding them, waiting for PSA to open again. They will have to do some kind of tiered approach when opening up a $100 service level, and definitely when they open up a $50 service level, because if they don't, they are going to literally receive millions of cards in a few weeks.

PSA graded 669,000 cards in August. That seems to be about their capacity. When they open up Regular, I suspect they'll receive 4-5 months of work in 3-4 weeks. It will be interesting to see how they handle it.

[Peter_Spaeth]

Do we really think PSA has closed the door on dealers who submit massive quantities of lesser stars and who have been mainstays of their business for years like 4 Sharp Corners?

[53toppscollector]

Originally Posted by Peter_Spaeth

Do we really think PSA has closed the door on dealers who submit massive quantities of lesser stars and who have been mainstays of their business for years like 4 Sharp Corners?

I think there are 2 things to consider:

1. From a business perspective only, PSA is better off grading fewer cards at a higher price to meet their targets. Grading 500,000 cards at an average cost of $100 per card is $50M. Grading 1,000,000 cards at $50 per card gets you the same $50M, but with more actual work/labor. Obviously. It has been in PSA's interest to keep only a few service levels open, at much higher prices. And if they were hurting moneywise, I suspect they'd have opened up more service levels, but I am guessing they've received a steady stream of cards at Express and Super Express over the last few months.

2. Nat Turner has talked a good game about the importance of the set registry and the ability to grade base cards at a reasonable price. But people sending in 5th year Craig Biggio cards at $8 per card is basically how we got into this backlog. The set registry is important, it is basically what got me back into the hobby 5 years ago, even though my stance on it has changed drastically in the last 18 months. I suspect bulk/value will come back eventually, at something like $20 per card, but with massive turnaround times (12-18 months minimum)

I think what we have learned, if nothing else, is that PSA is still the gold standard in terms of grading, despite all of their obvious flaws. They clearly know that too, and know that they can pretty much set the terms at this point, and a big portion of the hobby base will just go with whatever they offer. SGC seems to have picked up some small market share, but not enough to worry PSA at all. And Beckett appears to mostly just be a lost cause at this point

[Johnny630]

Originally Posted by 53toppscollector

I think there are 2 things to consider:

1. From a business perspective only, PSA is better off grading fewer cards at a higher price to meet their targets. Grading 500,000 cards at an average cost of $100 per card is $50M. Grading 1,000,000 cards at $50 per card gets you the same $50M, but with more actual work/labor. Obviously. It has been in PSA's interest to keep only a few service levels open, at much higher prices. And if they were hurting moneywise, I suspect they'd have opened up more service levels, but I am guessing they've received a steady stream of cards at Express and Super Express over the last few months.

2. Nat Turner has talked a good game about the importance of the set registry and the ability to grade base cards at a reasonable price. But people sending in 5th year Craig Biggio cards at $8 per card is basically how we got into this backlog. The set registry is important, it is basically what got me back into the hobby 5 years ago, even though my stance on it has changed drastically in the last 18 months. I suspect bulk/value will come back eventually, at something like $20 per card, but with massive turnaround times (12-18 months minimum)

I think what we have learned, if nothing else, is that PSA is still the gold standard in terms of grading, despite all of their obvious flaws. They clearly know that too, and know that they can pretty much set the terms at this point, and a big portion of the hobby base will just go with whatever they offer. SGC seems to have picked up some small market share, but not enough to worry PSA at all. And Beckett appears to mostly just be a lost cause at this point

James you're very well spoken. I agree :-)

[Peter_Spaeth]

Originally Posted by 53toppscollector

I think there are 2 things to consider:

1. From a business perspective only, PSA is better off grading fewer cards at a higher price to meet their targets. Grading 500,000 cards at an average cost of $100 per card is $50M. Grading 1,000,000 cards at $50 per card gets you the same $50M, but with more actual work/labor. Obviously. It has been in PSA's interest to keep only a few service levels open, at much higher prices. And if they were hurting moneywise, I suspect they'd have opened up more service levels, but I am guessing they've received a steady stream of cards at Express and Super Express over the last few months.

2. Nat Turner has talked a good game about the importance of the set registry and the ability to grade base cards at a reasonable price. But people sending in 5th year Craig Biggio cards at $8 per card is basically how we got into this backlog. The set registry is important, it is basically what got me back into the hobby 5 years ago, even though my stance on it has changed drastically in the last 18 months. I suspect bulk/value will come back eventually, at something like $20 per card, but with massive turnaround times (12-18 months minimum)

I think what we have learned, if nothing else, is that PSA is still the gold standard in terms of grading, despite all of their obvious flaws. They clearly know that too, and know that they can pretty much set the terms at this point, and a big portion of the hobby base will just go with whatever they offer. SGC seems to have picked up some small market share, but not enough to worry PSA at all. And Beckett appears to mostly just be a lost cause at this point

Logical points to be sure. Two things. One, I'm stunned so many people are sending in so many cards at these higher levels. Incredible. Where are all these (presumably) expensive cards to be worth $150 and up for grading coming from? Two, even if it might be rational to stop taking subs from the 4 Sharps of the world, I still suspect there is a back door here for dealers who have been that instrumental to the success of the company.

[Johnny630]

Originally Posted by Peter_Spaeth

Logical points to be sure. Two things. One, I'm stunned so many people are sending in so many cards at these higher levels. Incredible. Where are all these (presumably) expensive cards to be worth $150 and up for grading coming from? Two, even if it might be rational to stop taking subs from the 4 Sharps of the world, I still suspect there is a back door here for dealers who have been that instrumental to the success of the company.

Peter I don't necessarily think that the cards being sent it are expensive. I feel it's the inflow of more people who have a ton of money that think of PSA cards as an investment tool/assest they don't care if its $250 or $150 a card, that's peanuts to them. They just want the cards back quick. PSA in terms of business decision, to me I feel is making all the right moves. The slow and steady tiered approach to lowered services levels is benefiting them.

[Peter_Spaeth]

Originally Posted by Johnny630

Peter I don't necessarily think that the cards being sent it are expensive. I feel it's the inflow of more people have a ton of money that think of PSA cards as an investment tool/assest they don't care if its $250 or $150 a card, that's peanuts to them.

Crazy if true lol.

[hcv123]

I suspect a lot of the subs are new/renewed collectors looking at their raw cards and thinking - "Holy $hit!" - mine is a 9 or 10 and well worth the $150 - $300 grading fee........I think most of us know the end of that story.

[chadeast]

Originally Posted by Peter_Spaeth

One, I'm stunned so many people are sending in so many cards at these higher levels. Incredible. Where are all these (presumably) expensive cards to be worth $150 and up for grading coming from?

+1. I assumed that the business would mostly dry up at that price level, and that PSA would be forced to return to reasonable grading prices. I seem to have been proven wrong. I continue to be stunned month after month. And even if we eventually see $20 per card, that is not low enough to keep graded set collecting alive. Even if they eventually get back to $8 per card specials, they may have already killed off a large chunk of graded set collecting by that time. It remains to be seen if that will happen, but if it does it could eventually come back to hurt PSA (and all TPGs) in the long run, after the current boom ends. They are going to need to keep grading a lot of cards to justify their expenses given the massive growth that they've recently undergone.

[Peter_Spaeth]

Originally Posted by chadeast

+1. I assumed that the business would mostly dry up at that price level, and that PSA would be forced to return to reasonable grading prices. I seem to have been proven wrong. I continue to be stunned month after month. And even if we eventually see $20 per card, that is not low enough to keep graded set collecting alive. Even if they eventually get back to $8 per card specials, they may have already killed off a large chunk of graded set collecting by that time. It remains to be seen if that will happen, but if it does it could eventually come back to hurt PSA (and all TPGs) in the long run, after the current boom ends. They are going to need to keep grading a lot of cards to justify their expenses given the massive growth that they've recently undergone.

Yeah, hard to believe anyone is paying $150 to grade a 66 Topps Chico Ruiz. And I agree, no matter how many people may be crazy now, the supply of cards on which people are willing to spend $150 and up to grade just cannot be limitless.

[53toppscollector]

I think in an ideal world, they develop a service level specifically for base cards, with a fee of $10, but turnaround times of 12-18 months, something like that.

If you are playing the set registry game, anything more than $10 per card for a common just feels excessive. If you are putting together a fully graded set, you probably also don't need the card back in 3 weeks because you aren't flipping it. By putting in a very long timeline for returning the cards, it also deters flippers, or at least makes it more difficult for them.

[soxinseven]

Originally Posted by Peter_Spaeth

Logical points to be sure. Two things. One, I'm stunned so many people are sending in so many cards at these higher levels. Incredible. Where are all these (presumably) expensive cards to be worth $150 and up for grading coming from? Two, even if it might be rational to stop taking subs from the 4 Sharps of the world, I still suspect there is a back door here for dealers who have been that instrumental to the success of the company.

My guess is the majority of cards being graded express right now are modern issues. People spend outrageous amounts on unopened wax in the hopes of hitting autos of superstars or parallel/refractor cards of prospects that are worth thousands in PSA 9/10.

[parkplace33]

Thanks for all the responses, but no knowledge on what PSA will do.

I called PSA as well, but they couldn't give me any information. I will just wait and see.

[Snowman]

Originally Posted by parkplace33

Thanks for all the responses, but no knowledge on what PSA will do.

I called PSA as well, but they couldn't give me any information. I will just wait and see.

If you were hoping for some inside information or something, you are almost certainly not going to get it. They keep these decisions very tight lipped. When they shut down back in March, it was a shock to nearly everyone working at PSA, including executives. The best we can do is speculate. Sometimes Nat Turner gives subtle hints in interviews, but that's about as close as you're likely to get.

[doug.goodman]

Originally Posted by 53toppscollector

PSA has hired a ton of new employees...

PSA graded 669,000 cards in August.

I'm curious how many graders are employed by everybody's favorite opinion seller.