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Special Report: Beckett, rival grading companies looking to take advantage of PSA suspension
When Professional Sports Authenticator (PSA) halted most card grading submissions on March 30, the trickle-down effect was immediate.
The other major players in the cutthroat third-party card grading medium had a chance to make their move on the industry leader. Beckett Grading Services (BGS) and Sportscard Guaranty (SGC), regarded as the Nos. 2 and 3 grading card companies, took on volume increases.
Add in the mix GMA Grading, which has been around for two decades, and newbies Hybrid Grading Approach (HGA) and Certified Sports Guaranty (CSG), and there is some real competition to take submissions away from PSA during its shutdown.
The vibrant market is impacting every grading company.
President of Beckett Collectibles Jeromy Murray, who has been with the company for 21 years, told Sports Collectors Digest (SCD) he wasn’t shocked when he heard PSA was halting submissions. BGS considered halting submissions as well due to the influx of orders coming in.
“To be honest, what PSA did with their decision didn’t really impact our business at all. Our submissions have been increasing for the past year-plus when the pandemic and stuff hit. It exploded this year,” Murray said on April 20. “To be honest, if PSA wouldn’t have announced it, I don’t think I would have really noticed it, just because the orders have increased so drastically this year even compared to last year.”
Special Report: How PSA suspension is impacting collectors, dealers
BGS is feeling the same sting as PSA as far as getting slammed with submissions. How far backlogged is the Dallas-based company?
“I’m not going to say, but — I say that somewhat jokingly with a smile — it’s millions upon millions of cards and thousands upon thousands of orders that are still in our vault,” Murray said. “We’ve had to expand our vaults; we’ve had to expand our workspace. We’re hiring as quickly as possible and have done a really, really good job adding to our operations staff and our operations into our graders.
“It’s a good problem to have. But like I said, we want to get our stuff back to the customers as quickly as possible in a way that we don’t tarnish our name by just rushing stuff out. I told somebody the other day when I was talking to them, ‘I can go down there and grade stuff right now and get the stuff out of there, but that would be the worst move ever if they let me grade cards, because I can’t do it.’ We have to be careful who we just throw in there to grade our stuff.”
Conservatively, Murray said BGS can grade anywhere from 5,000-6,000 cards per day.
“It varies based on if you’ve got subgrades — no subgrade orders can go much faster,” Murray said. “We’re really trying to push a lot of our customers: if you want stuff back in a quicker period of time, go no subs. It will save you some money, it will get stuff done quicker.”
BGS has been able to make a dent in its backlog daily. A few months ago, it changed its pricing and structure. BGS raised its rates for the two faster services: Premium and Express. Premium is now $250 per card and $125 for no sub-grades, while Express is $150 and $100 for no sub-grades. Standard is at $50 and $30 for no sub-grades, with Economy $35 and $20 for no sub-grades.
Murray noted that Standard grading is at about a seven-month turnaround, with Economy extremely backlogged.
BSG’s Premium service, which was its two-day service, is still being delivered in two to four business days. “It’s pretty much right on,” Murray said.
The Express service, normally a five-day turnaround, is now seven to 12 days on the return, while Standard, previously a 10-day service, is backed up to seven months.
“We’re working on orders from that that we received in late November/early December, I believe,” Murray said.
BSG’s Economy service, which was previously 20 to 30 days, is backlogged to about 10 months.
“We’re working on stuff that we got in July and August of last year,” Murray said. “It’s crazy to say that. You’ve said it for the last couple of months and you say those turnaround times, and it sort of shocks me. Even being around 20-plus years with the company, to say, ‘Hey, our 30-day service is 10 months’ is crazy.”
Murray would like to help ease the mind of collectors who submitted to BGS in the middle of 2020 and are still waiting for their cards to get graded.
“Really, right now the only thing I can say is, ‘I’m sorry. And we don’t want your cards here. We don’t, I promise you. And we’re doing our best to get it caught up,’” Murray said.
“What’s nice about what we have is that we give our customers options, and just say, ‘Hey, I understand you’re not able to spend $200 to get a card graded, here are your other options.’ You’re going to have to wait, that’s the thing.”
New Kids on the Block
The last two and a half months have been a whirlwind for CSG. The company started its grading service on Feb. 16 and was quickly thrown into the fire of the blazing hot industry.
CSG is a part of the Certified Collectibles Group (CCG), which includes the world’s largest third-party coin grading service, Numismatic Guaranty Corporation (NGC). In the last 34 years, CCG companies have certified 62 million coins, banknotes, comic books, trading cards, stamps, estate items and related collectibles.
“We knew going into this it would be incredibly busy,” CCG President Max Spiegel told SCD. “When we were planning this launch for the last year, it was clear that the sports card market just kept getting bigger and bigger and submissions kept increasing to our competition. We were as prepared as we possibly could be between hiring a ton of graders and support staff.
“Obviously, we are using AI to supplement our grading and improve the efficiency there and we use all sorts of automation technology. But the market just keeps growing and submissions keep growing, and to be perfectly honest, our submissions have exceeded even our high expectations and estimates before we launched.”
Spiegel said he was surprised when he learned that PSA was halting its submissions. But after reading PSA’s rationale for shutting down, he certainly understands the move. Spiegel also thought about the trickle-down effect to his company’s brand-new service.
“I’d say our submissions have increased every single week since we launched Feb. 16, and each week has been larger in terms of volume than the last,” Spiegel said. “It would be very difficult for me to pin down how many more we might have received because of any moves that (PSA) made, but I don’t see how it would hurt.”
When PSA announced it wasn’t accepting submissions other than at its $300 per card service, that move didn’t alter CSG’s thinking at all.
“Our strategy is just to deliver the highest quality services in a very reasonable turnaround time,” Spiegel said. “That’s been our goal since Day 1 and I think that’s going to be our goal. To further that goal, it’s really just a matter of hiring more people, training more people, continuing to improve our technology and equipment.
“I feel like we have a very good quality. I think a lot of people have complimented us on the holder and the accuracy of our grading. Obviously, our top two graders, they had previously worked at a competing grading service and they have 30 years of experience between the two of them. The people we’re onboarding have tons of experience, too. So, the quality is there, it’s just a matter of getting the capacity up.”
Spiegel said CSG is backlogged on its orders but declined to go into specific numbers.
“It depends on the grade tier — our WalkThrough and Express services are very fast; our Bulk is a bit slower than we would like,” Spiegel said. “I think we were targeting 60 business days, it’s a little bit slower than that right now. Yes, we have a backlog, but it’s not an unmanageable backlog.
“We are hiring and training at a very rapid pace. We now have 11 full-time sports card graders, and that’s in addition to the people who are grading Pokémon and Magic, which is a separate division of CGC Trading Cards. We’re adding people at a pretty fast pace. Certainly, on a weekly basis we’re onboarding people, either graders or support staff and I expect by the end of the year that number will be several multiples higher.”
CSG, which utilizes artificial intelligence to enhance its grading, charges considerably less than its longtime competitors. But that’s to be expected with a service that’s just getting its feet wet in the industry. However, CSG just raised its prices effective April 28 to reflect the going rate in the hobby.
CSG’s most expensive service is Unlimited WalkThrough, which costs $125 per card (an increase of $25 from the previous fee schedule) plus fair market value (FMV). WalkThrough is $125 per card (an increase of $25). Express is $60 per card (increase of $20). Standard is $30 (increase of $5). Economy is $20 (increase of $5). Bulk, which is a 50-card minimum, is $12 per card (increase of $4).
“The reality was, based on some changes at our competition, we were just too cheap relative to the competition and were starting to get a significant volume of cards because we were just too cheap,” Spiegel said.
Other Companies Make Their Move
Sports Collectors Digest reached out for comment to representatives from SGC, HGA and GMA, but the companies either didn’t respond or didn’t set up interviews.
SGC, generally regarded as the third most popular third-party grading company behind PSA and BGS, is hyping on its website “no backlog, no bloated turnarounds, no games.” It is telling customers: what you pay for, you’ll get.
“I thought it was going to be a huge opportunity for SGC and then, obviously, immediately, they tripled their prices from $25 to $75, because they got crazy volume, too,” said Chad Weldon, co-owner of Sports Card Junction in Pittsburgh. “I think the big winner from it has been HGA. I haven’t actually done anything with them, and I don’t know if I plan to. I would let something like that be around a while before I personally invested in it. We have customers in the store every single day talking about HGA.”
HGA, just like CSG, uses AI to enhance its grading. And, just like CSG, HGA is only a few months old.
HGA adds a little twist for customers with its slabs. They are color coordinated with team colors to provide the most aesthetically pleasing cards.
With PSA catching up on orders and BGS also behind, that presents some opportunities for other companies to increase their standing in the industry.
“Not a ton, because if PSA is already established as the front-line leader and couldn’t scale to this demand, I don’t think any of these other places are going to be able to just show up and say, ‘Well, we’ve got 200,000 square feet of warehouse space to store all this and start grading these, either,’” said Bart Bartholomew, a collector and administrator for the Facebook group PSA Graded Sports Cards Collectors.
Murray and Spiegel know how loyal PSA customers are and many won’t jump ship to other companies during PSA’s shutdown. But that doesn’t mean BGS and CSG don’t want to win over some new collectors and show them that their companies are trusted and experienced grading options.
“My message to them is, it can’t hurt to take a chance on us,” Spiegel said. “I think they’ll be very pleased with our service, both from a grading standpoint, the holder and hopefully from the turnaround time, too. It’s only our Bulk tier that’s a bit slower than we would like and, I think, our Economy tier, too.
“I think for any new collectors entering the market and trying to decide on a grading service, they should know that CSG may be a new company, but it’s part of the Certified Collectables Group (CCG). The Certified Collectable Group, we’ve certified 62 million collectables, combined fair market value of well in excess of 30 billion dollars. We’ve been doing this for 34 years.”
Murray said there have already been longtime PSA users who have moved to BGS slabs.
“We’ve had people that haven’t submitted with us in years amazingly reach out to us the last two weeks, and it’s customers that have contacted us before — dealers and shops — and said, ‘Hey, I want to give you guys a shot.’ That’s great,” Murray said. “I understand that people have to move around and do what’s right for their business.
“If BGS and PSA were caught up and they were able to turn their stuff around in a realistic time, fantastic. I think everybody goes away happy and all is good. You prefer one service over another, but I think right now with how hot the market is, if you’ve got one of the big grading services and you can get your stuff in and out as quickly as possible and on the secondary market or back in your hands, that’s what you desire right now.”
