43:45
How to Grade with PSA Shut Down (New Strategy)
The Geoff Wilson Show
Overview
This video discusses the impact of PSA's shutdown of its value service levels on the sports card grading market. It explores alternative grading strategies, introduces a new pre-grading service offered by Joe Davis of Got Baseball Cards, and analyzes the current landscape and future prospects of other major grading companies like Beckett (BGS), CGC, and SGC. The discussion highlights the challenges of grading capacity, the importance of turnaround times and pricing, and how collectors can adapt their grading strategies in the current environment.
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Chapters
- PSA has shut down all value service levels due to overwhelming demand, a situation Joe Davis saw coming after previous slowdown announcements.
- This shutdown disrupts a significant portion of the sports card grading business for collectors and dealers.
- The high demand leading to the shutdown indicates a booming sports card hobby, which is a positive overall sign.
- Hiring and training qualified graders is a complex and time-consuming process, making it difficult for companies to scale quickly.
Understanding the reasons behind PSA's shutdown is crucial for collectors to grasp the current market dynamics and the unprecedented demand for card grading.
The announcement of slower turnaround times preceded the shutdown, which historically has led to either price increases or service suspensions, as seen in 2021.
- Joe Davis launched 'GotPreGrade' to offer a pre-screening and pre-grading service for collectors.
- This service provides an expert opinion on a card's condition and potential grade, along with tamper-evident labels, offering transparency on flaws.
- The goal is to provide an affordable ($15) and timely (2-day turnaround) alternative for collectors who cannot use PSA's value services.
- This concept is not new, with companies like Beckett offering similar raw card reviews, but the current market need is exceptionally high.
This service offers a practical solution for collectors to gain confidence in their card's condition and potential resale value without the high cost and long wait times of traditional grading.
For new releases, collectors can use GotPreGrade for cards not valuable enough for the expensive PSA grading, allowing them to sell at a slight premium over raw cards with added confidence.
- PSA's regular service is now the only option for submissions, intended for cards valued at $500-$1500, making it costly for lower-value cards.
- The decision to grade with PSA's regular service should be based on the potential post-graded value, weighing the $80 fee against the raw card's worth.
- Turnaround times for PSA's regular service are a concern, as increased submissions from lower-value cards could lead to further delays.
- Alternative grading companies like Beckett (BGS), CGC, and SGC are becoming more viable options, though they also face backlog challenges.
Collectors need to make informed decisions about which grading service to use based on card value, cost, and expected turnaround times, considering the limitations of PSA's current offerings.
A collector with a $100 card might hesitate to pay $80 for PSA grading, but a $250-$300 raw card might justify the risk and cost for a potential 9 or 10 grade.
- Beckett (BGS) has a strong legacy in sports grading and is seen as having the best opportunity to gain market share from PSA's shutdown.
- BGS offers reasonable pricing ($20-$24 per card) and has historically been respected, especially for modern sports cards.
- Current turnaround times for BGS are around 3-4 months, which is a significant advantage over PSA's current situation.
- If BGS can maintain its pricing and turnaround times, it could potentially close the resale value gap with PSA over time.
BGS presents a strong alternative for collectors seeking reliable grading with reasonable turnaround times, potentially challenging PSA's market dominance.
Many collectors who previously submitted to PSA's value services have already begun sending cards to BGS, indicating a shift in submission patterns.
- CGC is a dominant player in the TCG market and is scaling rapidly, presenting a significant opportunity in sports cards, especially for lower-value or non-sports cards.
- SGC remains a strong choice for vintage sports cards, maintaining respect among collectors of older cards.
- While CGC has a large volume, its resale value in sports is still developing compared to PSA and BGS.
- SGC's focus has shifted more towards vintage, with less emphasis on modern releases compared to its past performance.
Understanding the specific strengths of CGC and SGC allows collectors to choose the best grading company for their particular type of card, whether it's vintage, modern, or TCG.
SGC is recommended for vintage cards, while BGS is suggested for modern sports cards, and CGC is a strong contender for TCG and non-sports cards.
- Waiting for PSA's bulk service to reopen could mean a wait of 11-12 months, with potential delays extending into 2027.
- The massive influx of 4 million cards in 5 days has significantly worsened PSA's backlog, exceeding 14 million cards.
- There's a hope that PSA might reopen certain service levels (like Value Max/Plus) sooner than others, potentially by the end of the year.
- A potential long-term solution could be PSA separating grading lanes for sports and TCG to improve efficiency, as TCG volume is a major driver of current backlogs.
This long-term perspective helps collectors manage expectations and plan their grading strategies, understanding that a return to pre-shutdown conditions for PSA may take a considerable amount of time.
The speaker speculates that PSA might not reopen all service levels until 2027, a prediction based on the sheer volume of submissions and the challenges of scaling operations.
Key takeaways
- The PSA shutdown of value services highlights unprecedented demand in the sports card hobby, creating opportunities for alternative grading solutions.
- Joe Davis's GotPreGrade service offers a timely and affordable way for collectors to get expert opinions on card condition and potential grades.
- When considering PSA's regular service, carefully evaluate the raw card value against the $80 grading fee to determine profitability.
- Beckett (BGS) is emerging as a strong alternative for modern sports cards due to its legacy, reasonable pricing, and manageable turnaround times.
- SGC remains the preferred choice for vintage sports cards, while CGC excels in the TCG and non-sports markets.
- Collectors should anticipate significant wait times for PSA's lower-cost services, potentially extending into 2027.
- Diversifying grading submissions across multiple reputable companies is a prudent strategy in the current market.
Key terms
PSA shutdownValue service levelsGrading capacityTurnaround timeGotPreGradePre-screeningRegular serviceBeckett Grading Services (BGS)CGC GradingSGC GradingVintage cardsModern cardsTCG (Trading Card Game)Backlog
Test your understanding
- What are the primary reasons PSA shut down its value service levels, and what does this indicate about the sports card market?
- How does Joe Davis's GotPreGrade service aim to address the current challenges faced by collectors, and what are its key features?
- What factors should a collector consider when deciding whether to use PSA's regular service for a card, given the current pricing and limitations?
- Why is Beckett (BGS) considered a strong alternative for modern sports cards, and what are its current pricing and turnaround time estimates?
- How do CGC and SGC cater to specific niches within the grading market, and what are their respective strengths and weaknesses?
- Based on current projections, what is the estimated timeline for PSA to potentially reopen its value service levels, and what factors influence this prediction?