PSA backlog

[BobbyStrawberry]

Honest question: what the !*&# is PSA doing? (From a business perspective, I mean.)

Instead of spending years failing to work through the backlog and angering their customer base, why not hire more people and expand their capacity?

[swarmee]

Originally Posted by BobbyStrawberry

Instead of spending years failing to work through the backlog and angering their customer base, why not hire more people and expand their capacity?

Honest answer: I believe they have more than tripled their capacity in the last couple of years, it just hasn't been enough for the market which has grown into base card slab flippers in the same time.
Their biggest failure seems to be keeping low prices for too long, so that the backlog grew quickly to an inordinate pile to ever grow out of.

[Mike D.]

Originally Posted by swarmee

Honest answer: I believe they have more than tripled their capacity in the last couple of years, it just hasn't been enough for the market which has grown into base card slab flippers in the same time.
Their biggest failure seems to be keeping low prices for too long, so that the backlog grew quickly to an inordinate pile to ever grow out of.

That’s my take as well. Also, people who say “just hire more people” must not have tried hiring anyone of late…it’s really difficult right now!

[BobbyStrawberry]

Originally Posted by Mike D.

That’s my take as well. Also, people who say “just hire more people” must not have tried hiring anyone of late…it’s really difficult right now!

Difficult? CU is worth close to a billion dollars and PSA is the industry leader. We're not talking about a Burger King franchise here.

[conor912]

Originally Posted by BobbyStrawberry

Difficult? CU is worth close to a billion dollars and PSA is the industry leader. We're not talking about a Burger King franchise here.

You’d be surprised how many people don’t want to sit in a dark room for 10 hours a day scrutinizing sportscards for $35k/year.

[Republicaninmass]

Originally Posted by conor912

You’d be surprised how many people don’t want to sit in a dark room for 10 hours a day scrutinizing sportscards for $35k/year.

More so in Newport Beach. Maybe they need an office in Podunk Iowa?

[Lorewalker]

The whole concept of these large group submissions is one I feel PSA should not encourage. By doing so I would think they are providing or at least implying assurances that the authorized dealer will safeguard participants' cards. So it begs the question if they have any liability or responsibility in this instance.

My bigger issue with it is that it creates an "unfair" competitive edge for the person or business who simply has the capacity to create these massive ongoing submissions. PSA was going to get the business from the individuals who make up these group subs anyway. These submitters now get much faster turnaround and they get a price per card that is significantly less. There is nothing stopping me from participating and sharing that edge but I like being able to control my own valuables to the extent that I can. I always worry something like this could happen or that cards gets switched out or there are delays on making the submission, etc. These subs are much different than two hobbyists piggybacking on an order. If my 200 card sub gets to PSA the same day one of these group subs of 5,000 cards gets there my sub is going to be there for months well after the 5,000 card sub has been returned.

[Tabe]

Originally Posted by conor912

You’d be surprised how many people don’t want to sit in a dark room for 10 hours a day scrutinizing sportscards for $35k/year.

If you're having trouble hiring, you're not paying enough. Period. $35k is incredibly low for a business charging $100-$150 per card.

[conor912]

Originally Posted by Tabe

If you're having trouble hiring, you're not paying enough. Period. $35k is incredibly low for a business charging $100-$150 per card.

Have worked in small businesses my entire life, sometimes there is no more money

[Mike D.]

Originally Posted by BobbyStrawberry

Difficult? CU is worth close to a billion dollars and PSA is the industry leader. We're not talking about a Burger King franchise here.

It’s not just fast food that’s hurting…try hiring a technician, a software developer, or basically any job up or down the salary scale. Unemployment is at 3.9%.

Higher wages can help…although that usually means higher prices. But we have a shortage of workers globally right now - probably with many contributing reasons.

That being said…PSA is having success hiring…from their website:

“ In January 2020, PSA's parent company Collectors Universe employed 421 team members. Today we stand 783 people strong and growing daily. We’ve been adding more than 2 people per business day for more than 6 months and we’re still going.”

[swarmee]

Plus, the modern market has been crashing hard and "investors" of the past couple of years seem over-leveraged in depreciating assets. If PSA hired 1,000 more and bought buildings to put them all in, it may not be the best decision in the long run. They have already announced their intention to open up multiple remote locations, but Southern California is an expensive place to run a company based on near minimum wage labor, with $500K houses the norm.

[Johnny630]

Originally Posted by swarmee

Plus, the modern market has been crashing hard and "investors" of the past couple of years seem over-leveraged in depreciating assets. If PSA hired 1,000 more and bought buildings to put them all in, it may not be the best decision in the long run. They have already announced their intention to open up multiple remote locations, but Southern California is an expensive place to run a company based on near minimum wage labor, with $500K houses the norm.

I have visions of PSA Grading Locations of Texas, Tennessee, and Florida, along with California and NJ for Autographs. That would be awesome.

[BobbyStrawberry]

Originally Posted by swarmee

Plus, the modern market has been crashing hard and "investors" of the past couple of years seem over-leveraged in depreciating assets.

I totally agree. This gets to the heart of my original question in that it seems then that their decision not to do more expansion of capacity is, in a way, admitting a lack of belief in their own product/service.

Contrast this with the approach SGC has taken, which seems to be "send us all your cards, we want more!"

[JCU]

I guess for myself I’ve never seen the value in getting them graded. When I began collecting and working in shops before owning one. Grading cards was the best part of the hobby. Learning from other critics and them learning from myself. The eye, the tools and techniques. It was important to the buyer and the seller. Now some ghost slaps a golden number on a case with a seal and everyone’s stuck with an interpretation that many times I feel is flawed. One time I picked up a Dr J rookie and called a friend who was a graders grader. I told him I’ve got something and I’ve got a notebook with a letter and I’m on my way over in an hour. He looked it over for 30 minutes or more. He said what’s your letter lol I told him if it’s the same as yours your buying me lunch. His was a M and mine was a W. Possibly the nicest on the planet. I believe it went to a very happy man in Colorado. Now it’s a number from some ghost. Maybe that’s best if you’re buying or selling. It’s just no fun and little discussion.

[jh691626]

For whatever it's worth, I did end up getting an allocation today at the PSA virtual ""event". I started at 3096 and it got all the way down to me after about 35 minutes.

They definitely awarded more than last time. I wonder if they are feeling more comfortable with where they are in terms of being able to crank them out in 90 days, or whether it was b/c this is the last one for now, or what.

I realize many of you could care less! But thought I would report in case people care and fully accept all arguments that I am dumb for paying $50 for economy grading. I'll report about whether it got turned around in 90 days.

Jeff

[Paulcurlee1]

Originally Posted by Mike D.

That’s my take as well. Also, people who say “just hire more people” must not have tried hiring anyone of late…it’s really difficult right now!

So there’s several ways to overcome that:
1) pay more to qualified people (raising wages shouldn’t be too hard since they’re a private company now
2) train card graders and incentivize it - lots of good people working in industries still that they’d probably prefer to be a card grader - I feel comfortable on that assumption
3) invest in automation that alleviates the human capacity requirement, decreases cycle time and increases accuracy.

If they aren’t having the above 3 conversations in the c-suite daily they’re doing it wrong.